Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) could lose out on a deal to acquire Botox Maker Allergan, Inc. (NYSE:AGN) if it does not move with speed and increase its proposed $54 billion takeover bid. Allergan has already held talks with Irish-based Actavis plc (NYSE:ACT) over a potential $60 billion merger. Bill Ackman of Pershing Square stands to win either way according to Bloomberg’s Olivia Sterns even if, he is to fail on his push for a Valeant sale.
Allergan continues to oppose a merger with Valeant arguing that such a deal will not be of any benefit in the development of products going forward. The possibility of Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) initiating cost cuts in research and development are some of the reasons why Allergan has opted to engage in talks with Actavis. Allergan, Inc. (NYSE:AGN) has also stated that merging with Valeant may result in job layoffs mostly in Irvine as a result of a reduction in spending.
“They would rather go to Actavis plc (NYSE:ACT) where they think they would be more constructive fit for their business and so far Actavis has come with a higher bid. Valeant said yes they would come back to a bid closer to $200 per share, which is where Actavis is currently is but again Allergan would rather sell to Actavis than to Valeant,” said Mrs. Sterns.
Actavis, unlike Valeant, seems like a perfect fit for Allergan according to sterns in the sense that it does not have a reputation of slashing R&D. Should Ackerman fail in his attempts to get Valeant to acquire Allergan, Sterns reports he will push for a merger between Valeant and Zoetis Inc. (NYSE:ZTS) that specializes in animal treatments.
“Bill Ackman wins either way but it looks he could come in there and tries to force a sell. Yes, it may be to Valeant Pharmaceuticals Intl Inc. (NYSE:VRX). They may want to get into animal health you heard Mike Pearson earlier this year say that he is interested in Animal health,” said Mrs. Sterns.
Either way Bill Ackman stands to win on whichever path Allergan decides to follow. Allergan, Inc. (NYSE:AGN) is to hold a shareholder’s meeting on December 18 to vote on whether a majority of the board members who are opposed to Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) sale are to be replaced.
Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.
