IRVINE, Calif. (AP) — Botox maker Allergan formally rejected on Monday a takeover bid from Valeant Pharmaceuticals, saying that the unsolicited offer worth nearly $46 billion undervalues the company and poses a significant risk to its growth prospects.
Shortly after Canada's Valeant and activist investor Bill Ackman made their offer public last month, Allergan announced a so-called poison pill plan, a defensive tactic that makes a buyout prohibitively expensive. Allergan also told Valeant that it didn't want to discuss a tie-up, but said that it would evaluate the offer.
Valeant spokeswoman Laurie Little said Monday in an email that her company was disappointed that Allergan made its decision without "engaging in any substantive discussions" with Valeant or Allergan's largest stockholder, Ackman's Pershing Square Capital Management LP. She added that they remain committed to pursuing this deal.
Under the proposed deal, Valeant said that it would exchange each Allergan share for $48.30 in cash and a portion of shares of Valeant Pharmaceuticals International Inc.
Allergan stockholders would own 43 percent of the combined company under that proposal.
Pershing Square, which holds a 9.7 percent stake in Allergan, agreed to take only stock if the deal went through, and would remain as a long-term shareholder of the combined company.
Allergan Chairman and CEO David Pyott told analysts during a conference call Monday that he did speak with Ackman recently and listened carefully to the investor. But he added that Ackman was essentially a co-bidder with Valeant, and "his views and interests may not be completely the same as other stockholders."
A Pershing Square spokeswoman declined to comment on Allergan's rejection.
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