A person familiar with the situation shared that Valeant Pharmaceuticals International Inc., together with activist investor Bill Ackman’s Pershing Square Capital Management LP, intends to boost its acquisition bid for Allergan Inc. in the eve of the companys shareholder meeting in December.
The person, who asked not to be named because the matter is still not public, said that the increase could amount to $15 per share, but explained that the company has not made a final decision on the takeover offer. In addition, Valeant has not decided how the cash and share portions of the bid would be divided. A higher bid could amount to about $191 a share, which is considerably larger than the previous bid of $176 cash-and-share offer, which was rejected by Allergan.
The new takeover offer could value Allergan at more than $56 billion, $4.5 billion more than the previous offer. If the deal is finalized, it would be the largest one signed in 2014, beating even the pending $54-billion purchase of AbbVie Inc., which is acquiring Shire Plc.
The two companies, however, are currently in a legal and public relations battle, right in the eve of Allergans shareholder meeting, which is scheduled on December 18th. Valeant says that Allergan is poorly managed, while Allergan is criticizing the strategy of its opponent.
The Chief Executive Officer of Valeant – Mr. Mike Pearson said in an interview for Bloomberg in July: “We have said many times if their board wants to sit down and negotiate we would be happy to do so. We’re quite confident that once this gets to a shareholder vote, the shareholders are going to vote for the deal. If shareholders choose not to, we will respect that and go away.”
The previous takeover offer of Valeant was described as “grossly inadequate” by Allergan, which also refused to meet with Valeants representatives. According to people familiar with the situation, recently Allergan has been focused on taking over Salix Pharmaceuticals Ltd, and has also been approached by Actavis Plc for an eventual sale.
Both the official representatives of Allergan and Pershing Square, through which the hostile bid of Valeant was made, refused to make any comments on the situation. A spokeswoman of Valeant did not reply to phone calls and e-mail messages asking for comment.
Valeant Pharmaceuticals International Inc. settled 2.19% lower at CA$139.84 per share yesterday in Toronto, marking a one-year change of +22.82%. The company is valued at CA$47.22 billion.
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