(Adds Valeant statement)
By Nadia Damouni
NEW YORK, Aug 11 (Reuters) - ValueAct Capital, a top shareholder in Valeant Pharmaceuticals International Inc , supports the company's independent business plan and does not believe the Canadian drugmaker has to buy Allergan Inc, the investor told Reuters on Monday.
ValueAct likes a potential combination between Valeant and its takeover target Allergan, but said a drawn-out bidding war for the Botox maker might be too distracting.
"A year on the sidelines waiting for (Allergan) to do a scorched-earth sort of defense is a huge cost to Valeant," ValueAct Chief Executive Jeff Ubben told Reuters in an interview.
ValueAct has a stake of roughly 5.7 percent in Valeant, making it the company's third-largest investor, according to Thomson Reuters data as of early May.
"Mike has other targets and other things to do with his low tax rate," Ubben said, referring to Valeant Chief Executive Mike Pearson.
In an emailed statement to Reuters on Monday, a Valeant spokesman said: "We agree that Valeant has very attractive stand-alone prospects."
Although Valeant still believes an Allergan combination would "create extraordinary value for both sets of shareholders," the spokesman said, Valeant also "has a rich pipeline of other business development opportunities."
Allergan is fighting a hostile $52 billion bid from Valeant teamed up with billionaire investor William Ackman. The company has accused Valeant and Ackman of violating securities laws by using insider information as they prepared a takeover bid for the drugmaker.
"We really believe in the stand-alone plan. We do not need to do the Allergan deal," Ubben said, adding that he saw Valeant stock rising to $130 to $140 within a year's time.
Shares of Valeant were down 1.5 percent at $107.51 on Monday afternoon on the New York Stock Exchange. The shares ended New York trading at around $126 on April 21, just before the takeover bid for Allergan was unveiled.
Representatives Allergan did not immediately respond to requests for comment. (Additional reporting by Olivia Oran, Writing by Soyoung Kim; Editing by Chizu Nomiyama and Matthew Lewis)