October 20, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Allergan Inc., maker of Botox, filed on Friday with the California Employment Development Department, indicating they will lay off 40 employees in Carlsbad, Calif.
The company, headquartered in Carlsbad, has spent the last several months battling a hostile takeover bid by Canada-based Valeant Pharmaceuticals International Inc. and New York-based Pershing Square Capital Management.
In September, Allergan filed a Worker Adjustment and Retraining Notification (WARN) with the California Employment Development Center to cut 129 jobs. This and Friday’s announcement is just another in a series of layoffs this year as the company restructures. Allergan has stated they expect to cut about 1,500 jobs companywide this year.
In August of this year the U.S. Security and Exchange Commission (SEC) announced they were investigating Valeant Pharmaceuticals and Pershing Square for possible insider trading.
In March, Pershing Square bought up about 10 percent of Allergan’s stock, making it Allergan’s largest shareholder. Then, in April Valeant and Pershing announced the joint bid, which resulted in a 15 percent stock increase. Pershing came away with approximately $1 billion in gains. Allergan responded with a lawsuit.
This led to a series of escalating moves on both sides. Allergan attempted to buy Salix Pharmaceuticals in order to fend off the hostile takeover bid. Pershing Square asked for a special meeting of stockholders several times in order to push their agenda and convince stockholders to approve the acquisition.
Earlier this month, rumors indicated that Valeant planned a higher bid closer to the December shareholder meeting. The expected increase would be almost $15 per share, which would bring the offer to more than $191 per share. This would total almost $60 billion in cash and stock. In addition, Actavis PLC made a takeover bid for Allergan in September, which was rejected.
Valeant is headquartered in Laval, Quebec and has a broad range of market areas, including prescription dermatology, eye health, aesthetics, consumer products, neurology and oral health. The company has acquired more than 100 smaller companies since 2008.
The Allergan board has been vocal in its opposition to the Valeant acquisition attempts. On September 29th the board issued a blunt statement regarding Valeant’s offer.
“Our conclusion that Valeant’s offer is grossly inadequate and substantially undervalues Allergan remains unchanged,” said the board. “We continue to believe strongly that Valeant’s offer does not appropriately reflect the underlying value of Allergan’s assets, operations and prospects, including Allergan’s industry-leading franchises of global scale and its projected growth opportunities.”
