Tuesday, September 23rd14.4°C
23284
22754

Valeant has no plans to boost offer for Allergan to offset lower share price

MONTREAL - Valeant Pharmaceuticals (TSX, NYSE:VRX) says it sees no need to raise its offer again for Allergan, even though the Botox maker's refusal to negotiate has hurt the Quebec company's share price and reduced the value of its bid.

Chief executive Michael Pearson said Tuesday that he expects Valeant's share price will recover as it takes its offer directly to Allergan shareholders and bidding partner Bill Ackman of Pershing Square Capital Management pushes for a special meeting to vote on the removal of some Allergan directors.

"It's artificially depressed now but if we stay the course, if we have a path to getting this deal completed which we do and as time marches on, I don't think that's going to be an issue at all," he said during a conference call to address once more what it considers are misconceptions about the company.

Valeant has offered US$72 cash plus 0.83 of a Valeant share for each share of Allergan (NYSE:AGN). At Tuesday's closing price of US$118.87, up $1.12, that would value Allergan's shares at $170.66, making the offer worth some US$50.78 billion based on Allergan's 297.56 million shares outstanding. That's down from more than US$180 per share when the company boosted its offer May 30.

Allergan stock closed up $1.16 at US$160.53 on Tuesday.

Pearson told analysts his company's shares have been hurt by the "noise" coming from Allergan, which has repeatedly questioned the sustainability of Valeant's business model and its financial results.

Valeant increased the cash component of its offer, hoping Allergan's board would agree to negotiate. But Pearson said he suspected from Valeant's initial bid that the transaction would ultimately have to go directly to Allergan's shareholders.

"It is clear Allergan's management and our board will never sit down and act in the interest of their shareholders," he said, adding Valeant believes the vote would overwhelmingly support the takeover.

"We have a clear path to get this vote. And we are both determined and patient. Time is on our side."

California-based Allergan (NYSE:AGN) has repeatedly spurned Valeant's offers as underpriced and risky.

Valeant (TSX:VRX) said proxies seeking support for its bid could be mailed in "the near-term," but Allergan will likely try to delay the vote as long as possible.

Pershing Square Capital, which controls 9.7 per cent of Allergan's shares can call for a special meeting to remove directors once it has support from 25 per cent of shareholders. If directors are removed their replacements could be elected about two months later, setting the stage for negotiations.

Pearson questioned why Allergan wouldn't push for an early vote if it was so confident of having its shareholders' support.

"The fact that they're doing everything possible to delay this shows that they are not optimistic in terms of getting to the actual shareholder vote, so I'm sure there will be lots of noise but at the end of the day we are very, very confident that the shareholders will vote in the favour of this deal and we'll be very, very patient because our business is performing extremely well."

He said more than 50 per cent of Allergan's shares have been traded since news of Valeant's bid surfaced April 21. A significant number are owned by hedge funds and arbitrators who bought at a high price and are interested in a transaction.

Valeant's shares gained $3.57, or three per cent, at US$121.32 on the New York Stock Exchange. They were up to $130.83 in Toronto. Allergan's shares gained $2.77, or 1.7 per cent, at US$162.14 in New York.

Follow @RossMarowits on Twitter

The Canadian Press


Read more Business News

22831


Recent Trending




Today's Market
S&P TSX15152.63+23.63
S&P CDNX925.56-2.53
DJIA17130.30-42.38
Nasdaq4529.657+1.968
S&P 5001990.89-3.40
CDN Dollar0.9036-0.002
Gold1223.30+5.40
Oil91.50-0.91
Lumber329.50+2.90
Natural Gas3.924+0.016

 
Okanagan Companies
Pacific Safety0.16-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.29+0.02
Cantex0.05+0.01
Anavex Life Sciences0.2039-0.0156
Metalex Ventures0.055+0.005
Russel Metals34.77-0.60
Copper Mountain Mining2.41+0.01
Colorado Resources0.160.00
ReliaBrand Inc0.0206-0.0043
Sunrise Resources Ltd0.02-0.005
Mission Ready Services0.270.00

 



23481

FEATURED Property
192997221-1880 Old Boucherie Road
3 bedrooms 2 baths
$69,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Is this a fair offer from ICBC?

“Is this a fair offer from ICBC?”…. “How much should I settle for?”… “What is my claim worth?” These are just some of the questions I regularly get as...


Disruptive innovation

Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...


Executors and their duties

There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...

_



23499

23448


Member of BC Press Council


22707