Valeant again boosts offer for Allergan


The new bid raises the cash portion of the deal to $72 per share from $58.30 previously. The stock portion - 0.83 shares of Valeant (VRX +2.9%) for each share of Allergan (AGN +6.7%) remains the same.

As part of the new offer, Pershing Square - Allergan's largest shareholder with a 9.7% stake - has agreed to elect to receive only stock and exchange its shares for Valeant shares at a 1.22659 exchange ratio.

Bill Ackman: "[I] offered to give up $600 million of value to the other Allergan shareholders and exchange our shares for Valeant stock if Valeant were prepared to increase its offer to the other Allergan shareholders. We believe that our gesture to the other Allergan owners makes an extraordinarily strong statement about our belief in the long-term value of this highly strategic business combination."

Previously: Valeant boosts offer for Allergan

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Comments (16)
  • Detroit Bear
    , contributor
    Comments (300) | Send Message
     
    Billy wants this deal pretty badly.
    30 May 2014, 02:50 PM Reply Like
  • Charles A. Smith
    , contributor
    Comments (1264) | Send Message
     
    Pearson said just two days ago that VRX was "not going to keep offering against ourselves." I guess Ackman's phone call changed his mind.

     

    Still not enough cash.
    30 May 2014, 03:50 PM Reply Like
  • stockplaza
    , contributor
    Comments (828) | Send Message
     
    Billy still belongs in jail for front running a billion in profits. Now he pretends as if he is giving away 600M of benefits. Idiot, his profits by front running is what keeps many away from Wall St and consider it a Fraud St.

     

    Clones of Bill should be stopped from front running and hijacking backdoor deals
    30 May 2014, 08:41 PM Reply Like
  • fjm1058
    , contributor
    Comments (6) | Send Message
     
    Ackman's ploy to disperse $600M back to Allergan Shareholders should send all shareholders a clear message -- Ackman has way more to gain from this deal than Allergan Shareholders do. Don't fall for his activist games. Allergan is run by an amazing Board of Directors that have consistently added to shareholder wealth year over year.
    31 May 2014, 05:56 AM Reply Like
  • Uncommon Profit Investor
    , contributor
    Comments (983) | Send Message
     
    If you consider the $50 per share of debt that Valeant has, its a really bad deal for Allergan shareholders. Allergan has $5 cash per share.

     

    Thats why Valeant touts P/E instead of EV/EBITDA.
    1 Jun 2014, 01:30 PM Reply Like
  • SivBum
    , contributor
    Comments (2710) | Send Message
     
    Financial engineers who raid the treasuries of both company for the bankers, hedge funds and the few executives at the top. Does the merger add value to the society as a whole?
    30 May 2014, 03:03 PM Reply Like
  • Retail Investor
    , contributor
    Comments (793) | Send Message
     
    valeant should look at taro pharma.
    30 May 2014, 03:40 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
     
    I hope this goes through. Actually, Bill Ackman better hope it goes through.
    31 May 2014, 12:07 AM Reply Like
  • Uncommon Profit Investor
    , contributor
    Comments (983) | Send Message
     
    Ackman said: "We believe that our gesture to the other Allergan owners makes an extraordinarily strong statement about our belief in the long-term value of this highly strategic business combination.""

     

    What about ValueAct selling Valeant at the same time? They understand Valeant better than any other investor.
    31 May 2014, 02:05 AM Reply Like
  • fjm1058
    , contributor
    Comments (6) | Send Message
     
    Crazy antics by a desperate company and a cocky activist investor. Allergan shareholders should be running away as fast as possible -- I mean really; Pearson versus Pyott? No contest! Pyott has delivered amazing and consistent growth to shareholders every year, and will continue to do so in the future. Valeant is a clear roll up that will be bankrupt if this deal doesn't go through. Allergan stands for innovation and ingenuity - it would be a shame for patients, physicians, employees, and America if this deal were to go through! I am an Allergan Investor, and I DONT want this deal. Team Allergan!
    31 May 2014, 05:57 AM Reply Like
  • Charles A. Smith
    , contributor
    Comments (1264) | Send Message
     
    Not crazy at all. Ackman saw a chance to push the deal price closer to where it needs to be and took it. A solid gesture of goodwill on his part. I'm as big a Pyott fan as anyone, but AT A PRICE no management team is invulnerable. The least it will accomplish is bringing AGN to the negotiating table, where, hopefully Pyott et al can take advantage of VRX's desperation to get the deal done. Now the serious bargaining will begin.
    31 May 2014, 07:43 AM Reply Like
  • fjm1058
    , contributor
    Comments (6) | Send Message
     
    I appreciate your comments, however, I respectfully disagree. I'm encouraged by the fact that there still a CEO who is willing to stand up for what is right. There is more at stake in the pharmaceutical/biotech industry (patient care, drug costs, and the ability to discover breakthroughs that can change the world) regarding mergers and acquisitions-especially when it includes companies like Valeant which would stifle all the amazing innovation that Allergan stands for. The craziest thing about this deal is that Valeant - a debt ridden, junk-bond rated company - is trying to exploit the clean balance sheet of a well-run company and buy Allergan with their own money. Being a longtime investor in Allergan and following Mr. Pyott's career very closely, I am fully confident that there are better opportunities for Allergan than getting rolled up into Valeant.
    31 May 2014, 11:57 AM Reply Like
  • Uncommon Profit Investor
    , contributor
    Comments (983) | Send Message
     
    Charles,

     

    Remember, Ackman bought call options along with stock. His profit is much greater. He wants to impress Pearson so that Valeant keeps using him as a partner.

     

    How else in this flat stock market can Ackman generate such sensational returns. Getting tipped off about a deal and buying call options.
    1 Jun 2014, 10:47 AM Reply Like
  • Uncommon Profit Investor
    , contributor
    Comments (983) | Send Message
     
    Charles,

     

    It may not be goodwill.

     

    It depends on the strike price, premium and duration for Ackman's OTC call options.

     

    Options can cut both ways.
    1 Jun 2014, 03:01 PM Reply Like
  • fjm1058
    , contributor
    Comments (6) | Send Message
     
    Valeant and Ackman are desperate! Allergan is a company that has consistently delievered double digit earnings and growth every year! The trade off of Pyott for Pearson is insane. Valeant is a roll up - without Allergan they will be bankrupt in no time. They want this deal to get done so they don't need to see Allergan release yet another amazing quarter of results while VRX continues to show negative revenue growth!
    31 May 2014, 06:03 AM Reply Like
  • Uncommon Profit Investor
    , contributor
    Comments (983) | Send Message
     
    VRX is desperate to do a deal before the anniversary of B&L. Otherwise its 1% organic growth rate will be a real momo turnoff.

     

    VRX, a hedge fund favorite and momo, has 1% growth and trades at almost the same EBITDA multiple as AGN which has 20% organic growth. AGN shareholders get a very bad deal with this 60% stock offer.

     

    In their 170-slide presentation on May 28, VRX did not admit that their ex-B&L organic growth is negative. They only showed growth that includes B&L.

     

    I don't believe its a gesture of goodwill on Ackman's part, if this deal doesnt go through, he wants Valeant to partner with him again. Therefore he wants to be as helpful to Pearson as he can.
    1 Jun 2014, 10:47 AM Reply Like
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