(Reuters) – Botox maker Allergan (NYSE:AGN), fighting a hostile takeover bid by Valeant Pharmaceuticals (NYSE:VRX, TSE:VRX), said today that it was approached about a potential transaction by another party, identified as Actavis plc by a source familiar with the situation.
Valeant and Pershing Square Capital Management, which owns nearly a 10% stake in Allergan, made an offer that is now worth $55 billion for Allergan.
Allergan has been fighting a 6-month-old takeover battle with Valeant and is trying to convince investors that Valeant’s plan for cost-cutting is too extreme.
Reuters reported in early October that Actavis, which had already reached out to Allergan once in the prior months, was planning a 2nd approach to the company with an offer worth more than $200 per share.
Last week during a conference call with analysts, Allergan CEO David Pyott was asked if the company had received an offer from another party besides Valeant. He responded that he could not comment on "any particular market rumor."
It was not clear if Allergan’s disclosure today referred to a new approach or to 1 of the older overtures.
Valeant, whose cash-and-stock offer is worth about $182 per share, recently said it was prepared to raise its offer so that it would be worth around $200 per share.
Activist investor William Ackman, who runs Pershing Square, spearheaded calling a vote on new board members at a special meeting of Allergan shareholders. The meeting is slated to be held Dec. 18.
Allergan, which has sued Valeant and Ackman claiming insider trading, is waiting to decide on the Actavis approach to see if a California judge will issue a temporary injunction to exclude Ackman from voting at the meeting, a 2nd source familiar with the situation said.
If the ruling goes against Allergan, it could push the company to the table with Actavis, the source said. A hearing on the issue was held Oct. 28 and a ruling was expected any day.
Separately, Allergan confirmed that business development head David Lawrence had left the company recently. His departure followed that of Allergan’s top financial executive, who left this summer for family reasons.
"David Lawrence made the decision to retire from Allergan in the beginning of September to commit more time to his health and family," an Allergan spokesman said in a statement.
The spokesman declined to comment on emails written by Lawrence and disclosed as part of the insider trading lawsuit in which he described being "paddled" by the company’s top executive for suggesting it tone down a presentation called "Valeant is Vile."
Allergan shares rose $2.58, or 1.4%, to $192.64, about 6% above Valeant’s offer price, while Actavis gained $4.74, or 2%, to $247.48. Valeant added 0.3% to $133.37 in New York Stock Exchange trading.
Leave a Reply
You must be logged in to post a comment.