Allergan rejects Valeant and Ackman's raised takeover offer
By Caroline Humer and Ransdell Pierson
(Reuters) - The battle for botox maker Allergan Inc heated up on Tuesday as the company officially rejected a sweetened $53 billion takeover offer from Valeant Pharmaceuticals International and activist investor William Ackman.
Since Canadian drugmaker Valeant and Pershing Square Capital Management made a joint bid for the company on April 22, Allergan has stood firm against entreaties to sit down at the table and negotiate a deal.
Ackman, who has almost a 10 percent stake in Allergan, and Valeant raised their joint offer on May 28 and when investors were displeased and sold shares, added even more cash to it on May 30. He also said that he would call shareholders to a vote.
On Tuesday, Allergan once again declined the bid, saying that the offer undervalues the company and is too risky for shareholders. Allergan also reissued criticisms of Valeant's business model, saying that its reporting of financial information was opaque.
"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 said in a letter to Valeant CEO Michael Pearson.
A Valeant spokeswoman said that given Allergan's rejection, the company would move forward with its plan to take the deal to shareholders for a vote. The first step in that battle would be to elect a Valeant-Ackman backed board of directors at Allergan. A shareholder meeting to do that could be held in November.
"Valeant’s offer to combine with Allergan will create substantial value for both companies’ shareholders, and we look forward to giving Allergan shareholders the opportunity to speak for themselves," Valeant spokeswoman Laurie Little said in a statement.
Pyott said in an interview with Reuters that he was in for a long slog. Continued...