DEALTALK-Actavis may reap benefits of Valeant's hard work on Allergan

Wed Oct 8, 2014 4:54pm EDT
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By Soyoung Kim and Nadia Damouni

NEW YORK Oct 8 (Reuters) - Earlier this week, Canada's Valeant Pharmaceuticals International Inc appeared to have its plan to buy Botox maker Allergan Inc all mapped out.

The next phase in Valeant's months-long campaign to acquire Allergan for about $53 billion in cash and stock was to announce "blow-out" earnings on Oct. 20, which would have led to a jump in its share price and, therefore, the value of its bid, according to people familiar with the situation.

Valeant would have sweetened its offer even further, potentially bringing it somewhere between $195 per share and $200 per share from $175.94 per share as of Tuesday's closing price, these people said.

The bump would have put further pressure on Allergan ahead of its Dec. 18 shareholders meeting at which some of its board members might be voted off, under a campaign led by hedge fund manager Bill Ackman, Valeant's partner in the attempted takeover. Valeant, Ackman and many investors had expected Allergan to lose the vote.

However, Valeant's well-laid plans appeared to run into trouble this week, when rival drugmaker Actavis Plc came back into the picture as a possible white knight for Allergan.

After months of insisting that it was better off staying independent or being the acquirer, Allergan, led by Chief Executive David Pyott, was warming up to the idea of considering an offer that values the Botox maker at above $200 per share or more than $60 billion - only not from Valeant, people familiar with the situation told Reuters on Tuesday.

Meanwhile, a separate person said Actavis, which in recent months held informal conversations about a potential combination, would now like to take a hard look at buying Allergan and could reach out to the company as soon as this week to reiterate interest. Until recently, Allergan had indicated to Actavis that it wanted to stay independent, the source said.   Continued...