UPDATE 3-Valeant boosts $53.8 bln Allergan bid as Ackman opts for stock

Fri May 30, 2014 5:30pm EDT
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(Adds Allergan comment)

By Rod Nickel, Ransdell Pierson and Caroline Humer

May 30 (Reuters) - Valeant Pharmaceuticals International Inc said on Friday it would boost its takeover bid for Botox-maker Allergan Inc for the second time this week, contingent on the two sides negotiating.

Laval, Quebec-based Valeant said it would pay $72 in cash - up from $58.30 on Wednesday - and 0.83 share of Valeant stock for each Allergan share. The revised, unsolicited offer was triggered by Pershing Square, the hedge fund controlled by Bill Ackman that is Allergan's biggest shareholder, agreeing to take only stock in Valeant for its Allergan shares.

The offer is worth $53.8 billion, up from Wednesday's $49.9 billion bid.

Allergan shares closed 5.7 percent higher at $167.46 while Valeant shares ended 1.5 percent higher at $131.21.

BMO analyst David Maris said the revised offer will fall short, adding it seemed "odd and erratic" that Valeant would raise the bid two days after its chief executive, Mike Pearson, promised not to negotiate against himself.

"Like with marriages in olden days, when a dowry rises rapidly and without reason, you should take a closer look at the bride," Maris said.

But analyst Ronny Gal of Bernstein Research said the offer increases pressure on Allergan to take action to raise the company's value and also to negotiate with Valeant.   Continued...