Paul Nouri, CFP
Hedge fund manager, long/short equity, healthcare

Valeant And Allergan Are Not A Match Made In Heaven

At the end of January, I wrote an article asserting that pharmaceutical companies who were realizing most of their growth through acquisitions, and not including the costs inherent with those acquisitions, were in the throes of a bubble in their stock prices. Three months later, on April 21, one of the companies highlighted in the article, Valeant Pharmaceuticals (NYSE:VRX), in partnership with hedge fund Pershing Square Capital, proposed a hostile bid of Allergan (NYSE:AGN). Reportedly, Allergan management has been reluctant to engage in talks with Valeant because of the company's stated goal of achieving $2.7 billion in synergies, or about 75% of Allergan's current operating infrastructure.

Shortly after the announcement came out, the aforementioned hedge fund...

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