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Actavis 'considering' white knight bid for Allergan

Wall Street Journal says Irish pharma company set to challenge Valeant's bid
Actavis headquarters

Allergan has received an approach from Ireland-based pharma company Actavis that could save it from a hostile takeover bid from Valeant Pharmaceuticals, according to news reports.

Allergan, the marketers of Botox among other healthcare and aesthetic products, has been the target of an unwanted takeover bid from Canada's Valeant since April this year.

However, Allergan confirmed yesterday in a filing to the US Government concerning a special meeting of stockholders that another company has enquired about the possibility of a takeover.

“We have been approached by another party regarding a potential transaction,” said Allergan in the filing, although no company was mentioned by name.

“Our board has determined that premature disclosure with respect to the possible terms of any transaction might jeopardise continuation of any discussions or negotiations,” added the company.

The interested party was outed by the Wall Street Journal as Actavis, with the newspaper citing a “person familiar with the matter”.

If confirmed, a deal with Actavis - itself a former target of Valeant - would potentially be far preferable for Allergan, which has turned down multiple bids from Valeant due to concerns that its business model is overly-dependent on cost cutting.

Valeant's most recent bid valued Allergan at $53bn – around $176 per share – although last month Valeant wrote a letter to Allergan's stockholders that it would consider raising the value of its offer to $200 per share.

Responding at the time Allergan's chief executive David Pyott told investors yesterday: "all we saw was an offer to negotiate [with] no formal increase in the offer price."

"I would assume that there was an assumed increase in the Valeant stock price to corroborate those numbers," he added.

Timeline of Valeant's interest in Allergan

Valeant makes first offer of $45.7bn for Allergan
April 23, 2014
Allergan turns down bid criticising Valeant's model of "cutting and slashing"
May 13, 2014
Valeant raises bid to $50bn and divests portfolio of skincare assets to Nestle to clear way for deal
May 29, 2014
Valeant increases value of bid yet again
June 2, 2014
Another rejection from Allergan
June 11, 2014
Valeant goes directly to shareholders with offer
June 19, 2014
Allergan cuts jobs as part of business restructure to improve earnings per share
July 22, 2014
Allergan sues Valeant and hedge fund backer Pershing for insider trading
August 4, 2014
Valeant extends Allergan bid deadline to end of 2014
August 18, 2014
Valeant dangles higher bid in front of Allergan shareholders
October 28, 2014

Actavis has also been busy in the acquisition market the past few years, with its most recent major deal being the $25bn acquisition of Forest Laboratories in February this year, helping the company move its focus from generics to specialty medicines.

A year earlier Actavis agreed an $8.5bn stock-swap deal to buy fellow Irish company Warner Chilcott.

Actavis - originally an Iceland-based generics company - was itself taken over by Watson Pharmaceuticals in 2012, although Watson rebranded its global operations under the name Actavis following the acquisition.

Article by
Thomas Meek

4th November 2014

From: Research, Sales

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