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.