The takeover wars for Botox maker Allergan Inc went a notch higher on Tuesday as the company officially turned down a raised $53 billion bid from Valeant Pharmaceuticals International, which is backed by activist investor William Ackman.
Since Canadian pharmaceutical Valeant and Pershing Square Capital Management jointly made a takeover proposal on April 22, Allergan has consistently rejected invitation to meet and discuss a deal, as Reuters report.
Ackman, who owns about 10% of Allergan, and Valeant, sweetened their offer on May 28. Shareholders responded by selling off, but the two suitors added more cash to the offer on May 30. Ackman said he would also mobilize investors to a vote.
Today, Allergan turned down the overture, saying it undervalued the firm and exposed owners to risks. Allergan also reiterated its criticism of Valeant’s growth approach and added that its financial accountability was not clear.
“We do not believe your latest proposal offers sufficient or certain value to warrant discussions between Allergan and Valeant,” Allergan chief executive officer David Pyott wrote to Valeant boss Michael Pearson.
Spokeswoman Laurie Little for Valeant said Allergan’s dismissal of the offer meant the company would proceed with its intention to engage shareholders directly. The first move towards that would include assembling a board of directors at Allergan that’s got the baking of Valeant and Ackman. An investor conference to accomplish the objective is likely to be held in November.
“Rather than discussing the benefits of the proposed combination with Valeant, Allergan’s board continues to throw out inaccurate and misleading statements about Valeant,” Valeant said in a statement quoted by Forbes. Allergan’s accusations against Valeant have already been addressed, she said.
Little added that Valeant’s proposed merger with Allergan was beneficial to owners of both firms. She said Valeant looked forward to handing Allergan shareholders a chance to make independent decisions.
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