We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies. Cookie Policy.

Features Partner Sites Information LinkXpress
Sign In
Advertise with Us
LGC Clinical Diagnostics

Download Mobile App




Allergan Rejects Valeant Pharmaceuticals Takeover bid

By LabMedica International staff writers
Posted on 18 May 2014
Print article
Allergan (Irvine, CA, USA), the manufacturer of Botox, has rejected a USD 46 billion unsolicited takeover bid made by Valeant Pharmaceuticals (Valeant; Laval, Canada), on the basis that the proposal substantially undervalues the company.

The Valeant offer was made in conjunction with Pershing Square Capital Management (New York, NY, USA), an activist hedge fund founded and run by Bill Ackman, which reached a 5% ownership stake in Allergan on April 10, 2014, and started aggressively buying more shares until reaching a 9.7% hold on the company. At that point, Valeant and Ackman made an unsolicited cash and stock offer for the company that represented a 32% premium on Allergan's market value at the time.

The offer was rejected by the Allergan board of directors unanimously, claiming that Valeant's plan for an (at least) USD 2.7 billion annual cost cut would prevent the company from delivering growth that it could produce on its own, and that the offer was too risky. Allergan said that the current level of research-and-development and sales-and-marketing spending had enabled Allergan to launch several new products in recent years, increasing annual sales by an average of 11% since 2011. The company set a target of a 20%–25% increase in earnings per share in 2015.

Allergan's rejection was expected, since the company has adopted the so-called “poison pill defense”, wherein if any unapproved investor acquires more than 10% of Allergan's shares, other stockholders would have the right to buy discounted shares. Valeant, on its part, said that it is planning to hold a special meeting of Allergan shareholders to remove some (or all) of the company's directors; it also said it may call a referendum to see if the shareholders support Allergan-Valeant negotiations. The rejection of the offer also potentially sets the stage for a proxy battle between the companies.

“Valeant's method of cutting and slashing doesn't hold up for more than a brief period of time,” said David Pyott, CEO of Allergan. “Given Valeant's aversion to early-stage investment, under Valeant's ownership, this franchise would not have yielded the growth and remarkable value that Allergan has achieved.”

“We are disappointed that Allergan has rejected our value-creating offer without engaging in any substantive discussions with Valeant or Allergan’s largest stockholder, Pershing Square,” Valeant said in a statement. “We remain committed to pursuing this transaction.”

Valeant has bought roughly a half-dozen companies in the last two years, including contact lens maker Bausch & Lomb for USD 8.7 billion in 2013, shortly after acquiring Medicis Pharmaceuticals for USD 2.6 billion at the end of 2012. Valeant has grown by cutting spending and buying companies or proven products that will boost earnings, and has set its sights on becoming one of the world's five biggest pharmaceutical companies.

Related Links:

Allergan
Valeant Pharmaceuticals


Platinum Member
COVID-19 Rapid Test
OSOM COVID-19 Antigen Rapid Test
Specimen Collection & Transport
Anti-Cyclic Citrullinated Peptide Test
GPP-100 Anti-CCP Kit
Gold Member
Xylazine Immunoassay Test
Xylazine ELISA

Print article

Channels

Clinical Chemistry

view channel
Image: Reaching speeds up to 6,000 RPM, this centrifuge forms the basis for a new type of inexpensive, POC biomedical test (Photo courtesy of Duke University)

POC Biomedical Test Spins Water Droplet Using Sound Waves for Cancer Detection

Exosomes, tiny cellular bioparticles carrying a specific set of proteins, lipids, and genetic materials, play a crucial role in cell communication and hold promise for non-invasive diagnostics.... Read more

Molecular Diagnostics

view channel
Image: The study showed the blood-based cancer screening test detects 83% of people with colorectal cancer with specificity of 90% (Photo courtesy of Guardant Health)

Blood Test Shows 83% Accuracy for Detecting Colorectal Cancer

Colorectal cancer is the second biggest cause of cancer deaths among adults in the U.S., with forecasts suggesting 53,010 people might die from it in 2024. While fewer older adults are dying from this... Read more

Hematology

view channel
Image: The Gazelle Hb Variant Test (Photo courtesy of Hemex Health)

First Affordable and Rapid Test for Beta Thalassemia Demonstrates 99% Diagnostic Accuracy

Hemoglobin disorders rank as some of the most prevalent monogenic diseases globally. Among various hemoglobin disorders, beta thalassemia, a hereditary blood disorder, affects about 1.5% of the world's... Read more

Microbiology

view channel
Image: The new platform is designed to perform blood-based diagnoses of nontuberculosis mycobacteria (Photo courtesy of 123RF)

New Blood Test Cuts Diagnosis Time for Nontuberculous Mycobacteria Infections from Months to Hours

Breathing in nontuberculous mycobacteria (NTM) is a common experience for many people. These bacteria are present in water systems, soil, and dust all over the world and usually don't cause any problems.... Read more

Industry

view channel
Image: These new assays are being developed for use on the recently introduced DxI 9000 Immunoassay Analyzer (Photo courtesy of Beckman Coulter)

Beckman Coulter and Fujirebio Expand Partnership on Neurodegenerative Disease Diagnostics

Beckman Coulter Diagnostics (Brea, CA, USA) and Fujirebio Diagnostics (Tokyo, Japan) have expanded their partnership focused on the development, manufacturing and clinical adoption of neurodegenerative... Read more
Copyright © 2000-2024 Globetech Media. All rights reserved.