4 Min Read
(Adds comment on potential rival bids, no comment from Allergan, updates stock prices)
By Rod Nickel and Ashutosh Pandey
Oct 20 (Reuters) - Valeant Pharmaceuticals International Inc said on Monday that it may raise its bid for Botox maker Allergan Inc after the Canadian company posted a better-than-expected quarterly profit.
Valeant CEO Michael Pearson said a possible revised stock and cash bid would be worth more than $200 per share, assuming that Valeant's stock rises, and would include more cash. The current bid is worth about $52.7 billion or $176 per share.
Valeant shares were up 2.3 percent at $122.99 and Allergan shares were up 2.1 percent at $181.25, both in New York.
Valeant's third-quarter results were keenly anticipated for their potential impact on Valeant's bid for Allergan, maker of anti-wrinkle injection Botox. Unlike most quarters in which, according to critics, one-time charges related to acquisitions obscure Valeant's performance, the company made few deals as it stalked Allergan.
"When people have time to reflect on our performance this quarter, it hopefully goes a long way of convincing the Allergan shareholders that our currency is actually a great stock to own," Pearson told Reuters.
He said Valeant is considering adding more cash to its bid, and could make a decision on it at any time.
"We have some money in our pocket," he said.
Pearson expects that once it becomes clear Valeant will win Allergan, Valeant's stock will rise, adding further value to the bid.
Allergan declined to comment.
Valeant teamed up with activist investor Bill Ackman in April to bid for Allergan, which rejected Valeant's offer.
Allergan will hold a special shareholder meeting on Dec. 18, when Ackman hopes to remove most directors.
Valeant's relationship with Ackman and his Pershing Square Capital Management hedge fund is not strained as speculated, Pearson said.
Allergan may have other merger options in Actavis Plc and Shire Plc.
"If they're economically rational ... they can't beat us," Pearson said of any rival bidders.
The company raised its full-year adjusted earnings forecast to $8.22-$8.32 per share from $7.90-$8.10 per share.
The company raised its fourth-quarter adjusted profit forecast to $2.45-$2.55 per share on expectations of double-digit same-store organic growth.
Analysts on average expected the company to earn $8.03 per share for the year and $2.38 per share for the fourth quarter, according to Thomson Reuters I/B/E/S.
Valeant also raised its 2015 adjusted profit forecast to $10 per share from $9.65. Analysts were expecting $9.58 per share.
Valeant posted profit of $275.4 million, or 81 cents per share, in the third quarter, compared with a loss of $973.2 million, or $2.92 per share, a year earlier.
Cash earnings, or adjusted profit, was $2.11 per share, above the average analyst estimate of $1.99 per share.
Revenue jumped 33 percent to $2.06 billion, matching expectations. (Reporting by Rod Nickel in Winnipeg, Manitoba, and Ashutosh Pandey in Bangalore; editing by Saumyadeb Chakrabarty, Don Sebastian and Matthew Lewis)