Valeant extends Allergan bid deadline to end of 2014. The acquisition saga carries on beyond original August 15 deadline
The Valeant acquisition train has ploughed on and is continuing its pursuit of Allergan. An initial deadline was set for August 15th to make a decision of a $53 billion offer however this deadline has now been extended to the 31st of December.
This announcement has further extended the saga between the two companies, which started back in April of this year with a rejected $45.7 billion bid from Valeant. Valeant seem determined to break into the top pharma companies in the world via a series of takeovers. Although news of the extension has had negative effects on the Valeant share price as it has fallen sharply with the recent news.
Allergan, who already have successful; neurosciences and medical aesthetics businesses, have reportedly already turned down various offers from Valeant, which has forced negotiations to turn hostile. Allergan have voiced concerns over Valeant’s business model of growth by acquisition and streamlining, which has led to several efforts to ward off the potential suitor. One of these plans to convince shareholders of Allergans independence is to cut their workforce by 13%.
In a further twist in August Allergan filed a lawsuit in the US against Valeant. The lawsuit claims that Valeant’s hedge fund backer Pershing Square Capital and its owner Bill Ackman, had fraudulently built up a stake in the company ahead of Valeant’s first public offer for Allergan while “fully aware” of the Canadian pharma company’s takeover intentions.
With whatever happens next with this potential takeover deal, I can envisage a few more twist and turns for both parties before they come to a solution. Some might say watch this space.