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Valeant bids $47B for Allergan

  • In a cash-and-stock deal valuing Allergan (AGN +15.3%) at $152.88/share, Canadian firm Valeant Pharmaceuticals (VRX +5.2%) offers $48.30 in cash and 0.83 shares of its common stock in an unsolicited bid for the Botox maker.
  • VRX believes is can wring out at least $2.7B in annual cost savings with the merger but some analysts believe too-aggressive cost cutting could damage AGN's business.
  • Traders expect VRX to sweeten its offer, though. Shares currently exchange hands at $164.
Comments (6)
  • alex@drvitenas.com
    , contributor
    Comment (1) | Send Message
     
    Let the games begin! This is certainly going to be an extremely interesting process. With Allergan being the 800 pound gorilla in the aesthetics market and Valeant attempting to acquire there way into a competitive space this has been a very interesting last couple of years in this market space. Now if the two largest players join forces I am forced to question whether or not anti monopoly regulation would stop this type of acquisition/ merger (whatever ends up happening). Ultimately both of these companies are giving up to 25% rebates to their physician clients for volume purchasing but if they were not forced to compete with each other what is the real incentive for a volumetric price strategy?

     

    Any way this works out it will certainly be very interesting to watch.
    22 Apr, 12:11 PM Reply Like
  • kata
    , contributor
    Comments (452) | Send Message
     
    Was Ackman buying stock before the news was made public? Is he allowed to do that?
    22 Apr, 05:52 PM Reply Like
  • Snoopy1
    , contributor
    Comments (1107) | Send Message
     
    At the very least, Ackman was giving a taste to his hedge fund buddies since he lacks ethics of any kind. He will be repaid with future insider tips.
    22 Apr, 09:35 PM Reply Like
  • micium
    , contributor
    Comments (116) | Send Message
     
    Commenter says, "but if they were not forced to compete with each other what is the real incentive for a volumetric price strategy?" Well, if the clients no longer get their incentives, will they work as hard for business or work less?
    22 Apr, 07:48 PM Reply Like
  • 1GreatCFA
    , contributor
    Comments (850) | Send Message
     
    No...I don't think he's that stupid...but the Feds putting the brakes on this is interesting. The more these mega deals start coming down the tubes the more we need this loose monetary policy bs to stop. Would deals like this go down at 7% ?
    22 Apr, 08:30 PM Reply Like
  • kata
    , contributor
    Comments (452) | Send Message
     
    I understand the deal itself is predicated on the so called synergies aka busting it up and firing excess staff. Unfortunately their R&D goes out the window as well and its arguable that the real long term value here is in the R&D. But Boards have certainly been known to take the bird in the hand and let the bush be damned. And whoever ends up on the losing end will assuredly be picked up by competitors.

     

    It wasn't the deal that shocked but Ackman's apparently legal maneuvering. Maybe it shouldn't be.
    23 Apr, 10:04 PM Reply Like
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