Allergan Inc.’s share price up, to reduce its workforce by 13% while trying to avoid Valeant Pharmaceuticals takeover bid

Allergan Inc., which is known for manufacturing the wrinkle remover Botox, made an official statement today, revealing that it will eliminate 1 500 jobs and will cut another 250 vacant positions. The companys decision is provoked by the fact that Allergan Inc. is trying to avoid a hostile takeover bid from Valeant Pharmaceuticals International Inc.

According to Allergan Inc.s statement, the lay-offs represent about 13% of the global workforce of the company. Allergan also revealed that further restructuring will result in savings that will amount to about 475 million dollars in 2015. This is part of its strategy to increase its profits over the next six years.

No major acquisitions or share-repurchasing program were revealed by Allergan, even though the company has mentioned them as ways that may help it fend off the bids of Valeant and Pershing Square Capital Management. The costs reduction is expected to affect the companys board as well.

The company also reported that its net income during the second quarter amounted to 417.2 million dollars, which makes 1.37 dollars per share in comparison to the net income of 352.7 million dollars, or 1.17 dollars per share over the same period a year ago. Allergan Inc. also said that its earnings per share excluding one-time items amounted to 1.51 dollars a share. This result surpassed the median analysts forecasts of 1.44 dollars a share.

Mr. David Pyott, who is currently occupying the position of a Chief Executive Officer of the company said in the statement, which was cited by Bloomberg: “With continuing strong momentum, Allergan recorded the strongest increase in absolute dollar sales in any quarter in our history, and again delivered sales and earnings per-share growth above the high end of our expectations.”

Allergan Inc. was 1.94% up to trade at 170.64 dollars per share by 15:38 BST, marking a one-year change of +85.54%. According to the information published on CNN Money, the 16 analysts offering 12-month price forecasts for Allergan Inc. have a median target of 187.50, with a high estimate of 207.00 and a low estimate of 130.00. The median estimate represents a +12.01% increase from the last price of 167.40.