Allergan Reiterates Opposition to Valeant Pharmaceuticals’ Acquisition Proposal

The specialty pharmaceutical company Allergan, Inc. issued a statement to reiterate its opposition to Valeant Pharmaceuticals International, Inc.’s re-revised unsolicited proposal to acquire Allergan, dated May 30, 2014, which Allergan rejected on June 10, 2014.

In a statement, Allergan said that it had concerns with Valeant’s “unsustainable business model, which relies on serial acquisitions and cost reductions, as opposed to top-line revenue growth and operational excellence,” adding that a number of different third parties have also publicly expressed similar views.

The latest proposal by Valeant, dated May 30, 2014, was a combined cash and stock deal of approximately $52.7 billion involved acquiring all of the outstanding shares of Allergan for a combination of 0.83 of Valeant common shares, $72.00 in cash per share of common stock of the company, and a contingent value right related to sales of DARPin, Allergan’s developmental drug candidate to treat age-related macular degeneration. Pershing Square, Allergan’s largest shareholder with a 9.7% stake, also agreed to elect only stock consideration in the transaction and exchange its Allergan shares for Valeant shares at a 1.22659 exchange ratio and receive no cash consideration.

As previously announced on June 10, 2014, Allergan’s board of directors, rejected the revised proposal on the grounds that it  “substantially undervalues the company, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of the company and its stockholders.”

Source: Allergan  

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