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Valeant Pharmaceuticals Intl Inc (VRX) and Allergan, Inc. (AGN)’s Hostile Saga Nears Its End

On 18th December the winner of the epic corporate battle between  Allergan, Inc. (NYSE:AGN) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) which is supported by Pershing Square’s Bill Ackman, will be decided. CNBC‘s David Faber reported that a decisive shareholders’ meeting will be held on the above date.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

For those who have not been following one of the most protracted and fierce corporate battles between the two health care companies, Allergan, Inc. (NYSE:AGN) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX), only need to know that Bill Ackman is not a man to be messed with on Wall Street. He won’t stop fighting until he gets what he wants.

On the date mentioned above, Ackman through the company that he is backing, namely Valeant Pharmaceuticals Intl Inc (NYSE:VRX) will try to change the board composition of Allergan, Inc. (NYSE:AGN). He has put up a proposal of 6 directors that in his opinion should replace six of the nine existing directors of Allergan, Inc. (NYSE:AGN).

With this move he plans to pass the vote for  acquisition of the company by Valeant Pharmaceuticals Intl Inc (VRX).

There are two key dates for Valeant Pharmaceuticals Intl Inc (VRX) before the 51 majority shareholders meet on 18th December, according to Faber. One is 20th October, when Valeant’s earnings report comes out and the other is 30th October when it has its own shareholder meeting. A weak earnings report will drive Ackman even further from his acquisition goals, but that is still no indication that he will stop.

Faber said that Allergan still has a few alternatives left to stop this hostile takeover. However, none of them look very promising at this time. Firstly, Valeant could embark on an acquisition mission of its own, thereby depleting the balance sheet capacity of the company that Ackman is using to finance his deal. The second one is to find a white knight, or in other words another company that would acquire Allergen while leaving its management structure intact.

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