Losing Allergan deals blow to Valeant reputation

Mon Nov 17, 2014 1:25pm EST
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By Rod Nickel and Olivia Oran

WINNIPEG/NEW YORK Nov 17 (Reuters) - The failure of Valeant Pharmaceuticals International Inc to buy Allergan Inc leaves it with nothing to show for a seven-month, bruising pursuit.

Losing Allergan to Actavis PLC also hurts Valeant's deal-making reputation, said a source close to the company not authorized to speak publicly.

Allergan announced a $66 billion deal with Actavis on Monday that trumped Valeant's offer.

Valeant has made dozens of buys and is expected to triple revenues over three years by the end of 2014. But Allergan was a public setback for a company aiming to become a top-five pharma company by the end of 2016.

Allergan's rebuff will embolden future targets to "push back," said Peter Mann, portfolio manager at Gluskin Sheff + Associates, which owns shares in both Valeant and Allergan.

"Clearly, (Chief Executive) Dave Pyott and his team at Allergan have proven that there are other avenues," he said.

Valeant CEO Michael Pearson said on Monday that the Laval, Quebec-based company could not justify matching Actavis' bid.

Losing Allergan hurts Valeant's reputation for now, but in the long run its business model's advantages should win out, said Gautam Dhingra, CEO of Valeant shareholder High Pointe Capital Management.   Continued...