Thursday, October 30th6.4°C
23696
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 TSX14431.60-95.971
S&P CDNX774.28-6.79
DJIA17092.54118.23
Nasdaq4534.652-14.574
S&P 5001982.73+0.43
CDN Dollar0.8935-0.0006
Gold1202.20-22.7001
Oil81.13-0.83
Lumber322.50+0.90
Natural Gas3.715+0.066

 
Okanagan Companies
Pacific Safety0.12+0.02
Knighthawk0.01-0.005
QHR Technologies Inc1.15+0.02
Cantex0.055-0.005
Anavex Life Sciences0.180.00
Metalex Ventures0.03-0.005
Russel Metals32.32-0.25
Copper Mountain Mining1.96-0.06
Colorado Resources0.125-0.01
ReliaBrand Inc0.012-0.004
Sunrise Resources Ltd0.025+0.005
Mission Ready Services0.35-0.02

 



23015

FEATURED Property
1981453116 - 600 Sarsons Road
2 bedrooms 2 baths
$379,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Empty nesting: financial issues

Now that the children have ‘left the nest’, it is a good time to step back and take stock of your financial situation. Being on your own will probably cut household costs to some extent, b...


Keep your haunted home safe

Eerie sounds, spooky lights and Jack-o’-lanterns aglow—extra efforts at Halloween will keep visitors coming back for both tricks and treats. However, to keep the fun going, it’s imp...


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...

_








Member of BC Press Council


23691