MASSDEVICE ON CALL — Major Allergan (NYSE:AGN) shareholder Polen Capital Management isn’t getting worked up about Valeant Pharmaceuticals’ (NYSE:VRX, TSE:VRX) unsolicited $47 billion buyout offer, an executive told reporters.
Despite a cash-and-stock offer that represents a 7% premium, Allergan can do better on its own, Polen chief investment officer Dan Davidowitz told the Wall Street Journal.
Valeant announced this week that it teamed up with Pershing Square Capital Management hedge fund to offer $48.30 in cash and 0.83 shares of Valeant common stock for each Allergan share.
"We think we could get this type of price just from another couple of years of compound earnings growth," Davidowitz told the paper. "I don’t think this is that attractive of an offer."
Allergan responded with a "poison pill" strategy, with the board of directors adopting a 1-year plan to grant 1 preferred share purchase right on each outstanding share of the company’s common stock. The strategy allows stakeholders other than the a bidder to buy additional shares at a discounted price, potentially deterring would-be bidders by increasing costs.
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