November 12, 2014
By Riley McDermid, BioSpace.com Breaking News Editor
Actavis Plc is in talks to acquire embattled Botox maker Allergan for at least $60 billion, people with knowledge of the deal told Bloomberg on Wednesday, a move that could help the company fend off a hostile takeover by bitter rival Valeant Pharmaceuticals International, Inc .
Actavis’s pricing is certainly more attractive: Its bid values Irvine, California-based Allergan at more than $200 a share, a sharp premium from the $176 per share bid Valeant has been attempting to get Allergan to accept. Both bids would include cash and in-kind shares from the acquirer.
But neither price is as high as the $210 per share price tag Allergan has put on itself, though the gap is narrowing, unnamed sources told Bloomberg. The deal could be made as quickly as two weeks from now, the news service reported.
Generic drugmaker Allergan has spent most of this year battling with activist hedge fund investor Bill Ackman, a major shareholder in the company, who has been heavily involved in the effort to force Allergan to accept a $53 billion bid for the company from Valeant.
Ackman’s $15 billion hedge fund Pershing Square Capital Management is a top shareholder in Valeant, which has been attempting a hostile takeover of Allergan since April. Valeant quickly upped its offer over a series of weeks and eventually launched a tender offer.
Both companies have been using the legal system to force their points. In August, Allergan sued the two companies, alleging their cozy relationship has run afoul of insider trading regulations. Ackman owns 9.7 percent of Allergan, an amount the company has asked a court to disqualify as counting towards a 25 percent shareholder quorum.
More recently, Valeant said it is willing to raise its bid for Allergan as it ups the ante in an increasingly fractious hostile takeover bid, the company told Reuters last month.
Riding high on better-than-expected quarterly profits, Valeant CEO Michael Pearson told the news service that a revised offer could include stock and cash worth more than $200 per share, a jump from its current $176 per share offer. That’s assuming Valeant’s stock continues to rise, of course.
“When people have time to reflect on our performance this quarter, it hopefully goes a long way of convincing the Allergan shareholders that our currency is actually a great stock to own,” Pearson told Reuters. “We have some money in our pocket.”
