Saturday, October 25th6.2°C
23888
23129

Botox-maker Allergan rejects bid by Quebec-based Valeant Pharmaceuticals

Botox-maker Allergan said Monday that its board of directors has unanimously rejected a multibillion dollar hostile takeover bid by Quebec-based Valeant Pharmaceuticals International Inc. and activist investor Bill Ackman.

Allergan said the stock-and-cash offer, valued recently at $48 billion, creates risks for its shareholders and doesn't reflect its future earnings and growth.

The California pharmaceutical company said it expects to increase earnings per share by 20 to 25 per cent and continue to generate double-digit revenue growth in 2015.

"In addition to substantially undervaluing our company, your proposal includes a large stock component, which we believe is a risk for Allergan stockholders due to the uncertainty surrounding Valeant's long term growth prospects and business model, chairman and CEO David Pyott said in a letter to Valeant CEO Michael Pearson.

"Valeant’s strategy runs counter to Allergan’s customer focused approach. In particular, we question how Valeant would achieve the level of cost cuts it is proposing without harming the long term viability and growth trajectory of our business. For those reasons and others, we do not believe that the Valeant business model is sustainable," Pyott said in the letter.

Valeant (TSX:VRX) has offered US$48.30 in cash and 0.83 of a Valeant share for each share of Allergan (NYSE:AGN).

Ackman's Pershing Square Capital Management LP — Allergan's biggest shareholder at 9.7 per cent — has agreed to take only stock in the transaction.

Allergan Inc. stockholders would own 43 per cent of the combined company.

However, Allergan has adopted a "poison pill'' defence that will allow it time to consider alternatives and potentially block the bid.

Valeant has said it plans to initiate a "shareholder referendum'' of Allergan investors and may pursue a special meeting to remove some or all of the U.S. company's board of directors.

It said that such a referendum would determine if Allergan's shareholders want its board to negotiate with Valeant at the same time as it pursues alternatives to Valeant's hostile takeover bid.

Valeant capped off 2013 with 25 acquisitions, including eyecare company Bausch + Lomb. Pearson has said he would like to make Valeant one of the world's top five pharmaceutical companies.

The company has been focusing on dermatology, eye care, esthetics, non-prescription and niche products. Among its many acquisitions has been Edmonton-based Afexa Life Sciences, maker of the cold and flu remedy Cold-FX.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14543.82+56.99
S&P CDNX805.45-3.15
DJIA16805.41127.51
Nasdaq4483.715+30.923
S&P 5001964.58+13.76
CDN Dollar0.8901-0.0003
Gold1231.20+2.10
Oil81.02-0.73
Lumber336.40+6.80
Natural Gas3.631+0.009

 
Okanagan Companies
Pacific Safety0.105-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.07+0.015
Anavex Life Sciences0.194-0.004
Metalex Ventures0.045+0.005
Russel Metals33.39+0.23
Copper Mountain Mining2.03-0.05
Colorado Resources0.145+0.005
ReliaBrand Inc0.012-0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.445+0.035

 





FEATURED Property
2115945 342 Woodwind Court
$664,000
more details
image2image2
Click here to feature your property
Please wait... loading


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...


We can get on together

I was in LA this week. I witnessed such crazy and unusual circumstances as I strolled along Hollywood Blvd and Sunset Blvd. A far cry from sleepy Peachland in the Okanagan! The strange thing was, I f...


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...

_








Member of BC Press Council


22771