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Valeant hikes offer to acquire Allergan
May 28th, 2014
LAVAL, Quebec, and IRVINE, Calif. – Valeant Pharmaceuticals International Inc. has raised its bid to acquire Allergan Inc. by $10 per share, lifting the total value of the deal by about $2 billion to $49.4 billion.
Valeant on Wednesday said it increased its cash offer for Allergan to $58.30 per share as well as 0.83 shares of Valeant stock, the same as in its previous proposal. The initial offer of $48.30 per share, with a total deal value of about $47 billion, was announced late last month.
The new acquisition offer also adds a contingent value right for Darpin, Allergan's promising experimental eye drug, of up to $25 per share. In addition, Valeant said it would commit up to $400 million to develop Darpin.
In a letter to Allergan chairman and chief executive officer David Pyott, Valeant chairman and CEO Michael Pearson noted that his company's revised bid is based on feedback from discussions with Allergan shareholders.
"Our increased offer provides additional immediate value to the Allergan shareholders — we note that the cash portion of our revised offer alone represents approximately 50% of Allergan's unaffected share price — and provides Allergan shareholders with significant substantial additional value if Darpin achieves Allergan's expectations," Pearson stated in the letter.
Allergan on Wednesday confirmed that it has received Valeant's higher offer.
"The Allergan board of directors will carefully review and consider the revised proposal and pursue the course of action that the board believes is in the best interests of the company and all of its stockholders. No action by Allergan's stockholders is required at this time," Allergan said in a statement.
Earlier this month, Allergan announced that its board had voted unanimously against the Valeant acquisition proposal after a review determined that the bid "substantially undervalues Allergan, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of the company and its stockholders."
A day after Valeant's April 22 bid, which was made with hedge fund Pershing Square Capital Management, Allergan enacted a one-year shareholder rights plan, or "poison pill," and declared a dividend distribution of one preferred share purchase right on each outstanding share of the company's common stock.
Also on Wednesday, Valeant announced that it has sold all rights to aesthetic skin treatments Restylane, Perlane, Emervel, Sculptra and Dysport to Nestle S.A. for $1.4 billion in cash. The products would be part of Nestle Skin Health S.A., a new unit that the Swiss company formed in February. The business is centered on Galderma S.A., Nestle's 50-50 joint venture with L'Oreal. Nestle plans to acquire full ownership of Galderma in a deal expected to close this summer.