Allergan (NYSE:AGN) today urged its stockholders to reject the latest takeover bid from Valeant Pharmaceuticals (NYSE:VRX, TSE:VRX), worth roughly $51.54 billion, saying the hostile takeover attempt significantly undervalues Allergan.
A Delaware state court is slated to rule July 7 whether Valeant’s move to solicit shareholder, in concert with the Pershing Square hedge fund led by hedge mogul Bill Ackman, s violates the "poison pill" Allergan adopted to head off the unsolicited takeover.
Earlier this month Allergan’s board unanimously rejected Valeant’s twice sweetened bid to acquire the Botox-maker for $53.3 billion. Today the company said Valeant’s latest proposal is a step down from the roughly $53 billion offer it last put on the table.
The latest offer, equivalent to $173.20 per AGN share, is "substantially lower" than Valeant’s May 30 $179.25-per-share bid, Allergan said.
Allergan’s board was unanimous is determining that the latest bid "is grossly inadequate, substantially undervalues the company, creates significant risks and uncertainties for Allergan stockholders, and is not in the best interests of the company and its stockholders," according to a press release. "Accordingly, the board strongly recommends that Allergan stockholders not tender any Allergan shares to Valeant."
"Our board is unanimous in its determination that Valeant’s unsolicited exchange offer is grossly inadequate, substantially undervalues Allergan, and is not in the best interests of Allergan and its stockholders," Allergan chairman & CEO David Pyott said in prepared remarks. "The board strongly recommends that Allergan stockholders reject Valeant’s exchange offer and prevent Valeant from taking control of Allergan at a price that does not appropriately reflect the underlying value of Allergan’s assets, operations and prospects, including our industry-leading position and projected growth opportunities. Allergan has a track record of consistently acting in the best interests of its stockholders and the board continues to be confident that Allergan will create significantly more value than Valeant’s proposal."
AGN shares closed at $165.32 apiece June 20.