Allergan Board Targeted as Valeant Prepares a Hostile Takeover Bid

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Allergan Board Targeted as Valeant Prepares a Hostile Takeover Bid

Valeant Pharmaceuticals Inc on Monday readied to bolster its $53.8 billion acquisition bid for Allergan Inc by directly engaging owners of the Botox drug-maker in a turn of events that could take as long as a year.

The fight took another twist when Valeant backer Pershing Square, which is a hedge fund that owns 9.7% of Allergan stocks, called for a meeting whose agenda is to replace the firm’s board.

Bill Ackman, the chief executive officer of Pershing Square, alongside Valeant boss Mike Pearson in conference call, told shareholders he had called a meeting that could happen as early as August 7. But Ackman added that Allergan could delay honoring the request to as late as November. Pershing intends to use the meeting opportunity to push for replacement of Allergan’s directors, Reuters reported.

According to Pearson, Valeant intended into two to three weeks to file an offer with the US Securities Exchange Commission, a move that would take the takeover bid to Allergan investors. He asked Allergan to agree to talks with Valeant.

Allergan, the manufacturer of Botox therapy that’s administered into muscles to fix wrinkles said it would review the latest bid from Valeant. On Friday, Valeant upped its offer for the second time, saying it would part with $72 in cash and 0.83 fraction of its stock for every acquired Allergan share.

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In a conference call with experts, Ackman said shareholders “believe the merger makes tremendous sense, that it is a highly strategic transaction and it creates enormous shareholder value,” according to MarketWatch.

In dismissing the proposed merger of the two drug-makers, Allergan argues that Valeant, which has acquired several firms in recent times, has soared in value for the most part through takeovers as opposed to natural internal growth. The firm has asked investors not to respond to the offer as yet.

On Monday, Allergan stock rose 2% to $170.94.

To contact the reporter of the story: Yashu Gola at yashu@forexminute.com

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