Allergan Turning The Tables on Valeant

Allergan is attempting to block a recent Valeant hostile takeover bid by seeking the rumoured alternative merger deal with Actavis, according to media reports.

This isn’t as straight forward as many are making it seem. as both parties are disagreeing on the value of the deal. Actavis initial offer is thought to be around $200 per share with Allergan wanting more than $210 per share, this is resulting in a gap of about $3 billion dollars however talks are ongoing to reduce this gap.

Actavis had been rumoured as potential merger for Allergan after Allergan had rejected a $54 billion takeover bid from Valeant, although the Canadian company Valeant are now expressing their interest in putting in another offer at a similar price to what is being spoken about involving Actavis.

Valeant have made several bid for Allergan this year.

Valeant’s revised proposal substantially undervalues Allergan, creates significant risks and uncertainties for Allergan’s stockholders and does not reflect the company’s financial strength, future revenue and earnings growth or industry-leading R&D,” the firm’s chief executive David Pyott said of the $54 billion bid.

Allergan’s board claims that Valeant’s strategy of slashing costs after acquiring business would damage the value it has built and threaten the future of a number of promising pipeline projects.

The discussions that are being held between Allergan and Actavis are just one of the several ways Allergan have been fighting off the Valeant bid.

There has been a lot of controversy so far in Valeant’s pursuit of Allergan and earlier this month Allergan attempted to block shareholder Pershing Square, who is a key supporter of the Valeant takeover bid, from voting at a meeting which is due to be held in December of this year. However, a judge ruled that they would still be allowed to use their block vote in an attempt to replace several of Allergan’s directors with candidates who will support the merger.

Allergan have also posted an open letter to try and further dampen support for Valeant. The letter written by eye surgeons which was posted on the Allergan website, the surgeons expressed fears that the potential takeover would decrease R&D funding and negatively impact its practices, many of which are centred around eye care. Other clinicians have also been invited to sign.

Valeant itself has also been trying to court healthcare professionals in another of Allergan’s major franchises – cosmetic care. The firm says it had met with 45 influential cosmetic surgeons and dermatologists who use Allergan’s Botox to try and win them over.

The company reportedly paid for the clinicians’ flights, hotels and meals and agreed to pay consulting fees of up to $30,000.

Speaking to the Wall Street Journal, several of these doctors even said that they had indeed been won over by Valeant’s Allergan plans.

Alex Carson

PiR Resourcing leaders in senior life science resourcing. For more news and information, you can follow us on Twitter and LinkedIn.  For all our latest opportunities in the Life Science sector please click here.

Leave a Reply