Bill Ackman may be failing all together on his push to get Allergan to agree to a merger agreement with Valeant Pharmaceuticals Intl Inc. (NYSE:VRX). Bloomberg’s Olivia Sterns reports that Allergan, Inc. (NYSE:AGN) is giving Valeant pharmaceutical’s $54 billion takeover push a cold shoulder and remains focused on talks with rival Actavis plc (NYSE:ACT).
“Its big news and it’s a big thumb in the eye for Bill Ackman. [..] The news is that Allergan is said to be in Active talks, these talks are private with Actavis this would be a potential alternative deal, “said Mrs. Sterns.
In a regulatory filing to the SEC, Allergan, Inc. (NYSE:AGN) said that discussions about a potential merger transaction were underway and could lead to negotiations. Allergan has vehemently opposed Valeant Pharmaceuticals $54 billion hostile takeover arguing that its growth will be diminished with the merger as Valeant seeks to cut costs deeply.
Allergan also argues that Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) is bloated and will only benefit from the merger as one of the ways of paying up debt accumulated from other acquisitions carried in the past. Allergan had reportedly gone to court to seek an injunction that would have barred Mr. Ackman from voting at the shareholder meeting.
“Bill Ackerman has been pushing for Valeant to take over Allergan; he is on the board of Allergan, Inc. (NYSE:AGN). He has been trying to get rid of the directors who opposed the deal with Valeant. Instead, we know that Valeant has offered about $54 billion, Allergan thinks that is grossly inadequate,” said Mrs. Sterns.
Allergan stock continues to be the biggest beneficiary of the ongoing standoff with Valeant as the stock has risen to record highs of $197 way above Valeant’s valuation of $54 billion. Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) has already stated that it would be willing to raise its bid to at least $200 a share.
Allergan, Inc. (NYSE:AGN) is reportedly taking issue with Valeant Pharmaceutical’s mode of operations especially after carrying out acquisitions. Valeant Pharmaceuticals has built its business in the past through acquisitions as well as resorting to cut back on research and development expenses. Allergan, Inc. (NYSE:AGN) is reportedly afraid that the same will occur if it is to agree to a merger.
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