UPDATE 3-Valeant says improved bid for Allergan won't be all-cash
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By Euan Rocha
LAVAL, QUEBEC May 20 (Reuters) - Canada's Valeant Pharmaceuticals International said on Tuesday it will not make an all-cash bid for drugmaker Allergan Inc as many had expected last week when the company said it would improve its cash and stock offer for the Botox maker.
Michael Pearson, chief executive officer of the Canadian drugmaker, said Allergan shareholders favored Valeant's bid and preferred Valeant equity over more cash.
"We think their shareholders are convinced this is a good transaction and we have met with many, if not most of their shareholders privately and they have all told us they want this deal to be done," Pearson said on the sidelines of Valeant's annual meeting in Laval, Quebec.
"In terms of the currency, most of their shareholders would prefer to get more equity and less cash. They believe that the combination will not only create short term value in terms of the premium, but that longer term, it will continue to perform."
Valeant on April 22 offered $48.30 in cash and 0.83 of one Valeant share for each Allergan share in a massive $47 billion unsolicited bid with the support of activist investor William Ackman.
Allergan rejected the offer on May 12, citing the high stock component and steep cost-cut proposals. It said the offer was too risky due to uncertainty over long-term growth at Valeant, whose business model was unsustainable.
Valeant will announce its improved offer May 28 when it holds a meeting for shareholders of both companies to respond to Allergan's assertions. Continued...