Valeant launches hostile move for Allergan
Published 18/06/2014 | 02:30
Valeant Pharmaceuticals said it will launch a hostile offer for Allergan this week, allowing it to eventually take the unsolicited bid to shareholders.
Botox-maker Allergan has rejected Valeant's offer of cash and shares, but Valeant chief executive Mike Pearson said he sees no reason to adjust the bid a third time. Valeant shares have lost ground for 10 straight sessions, reducing the value of its Allergan bid to about $50.8bn (€37.5bn) from $53.8bn.
"Hostile is not our preferred approach," Mr Pearson said. "But this deal was so strategic and financially compelling that it really makes sense."
Valeant's stock is "artificially depressed," Mr Pearson said, after weeks of criticism by Allergan.
Shares of Valeant rose 0.2pc at $118 on the New York Stock Exchange in early trading. Allergan stock was up 0.5pc at $160.12.
Valeant held a webcast to rebut Allergan's latest criticism and clarify steps toward a hostile takeover.
Allergan's biggest shareholder, Pershing Square Capital Management, intends to mail proxy materials as early as this month to seek a special meeting later this year to change most of Allergan's board, Valeant said.
At the same time, Pershing is suing Allergan to confirm its special meeting would not trigger the company's poison pill takeover defence.
To trigger a special meeting, Pershing needs to gain additional support of shareholders representing 15.3pc of Allergan's ownership, topping up its own 9.7pc stake for a total of 25pc.
Valeant chief financial officer Howard Schiller said the company is confident enough Allergan shareholders will support calling the meeting, noting that more than half of Allergan's shares have traded since word of Valeant's initial offer leaked on April 21. Hedge funds and arbitrageurs interested in a deal now own a large percentage of Allergan, he added.
Allergan spokeswoman Bonnie Jacobs declined to comment. (Reuters)