Valeant Begins Tender Offer for Allergan Hostile Takeover

Valeant Pharmaceuticals International Inc. today began a tender offer to acquire the shares of Allergan Inc., the maker of Botox, the first move in its attempted hostile takeover of the drugmaker.

Valeant’s $54 billion cash-and-stock bid partly depends on Irvine, California-based Allergan removing anti-takeover defenses triggered if any one entity gains 10 percent or more of the company’s stock. It will be followed by an effort to replace most of the board and force a merger with Laval, Quebec-based Valeant. Valeant has teamed with Bill Ackman, who heads hedge fund Pershing Square Capital Management LP and took a 9.7 percent stake in Allergan to drive the deal.

“This offer, together with Pershing Square’s ongoing efforts to call a special meeting of Allergan stockholders, is part of Valeant’s clear path to complete a transaction,” Michael Pearson, Valeant’s chief executive officer, said today in a statement.

Allergan urged shareholders to take no action, and said its board of directors will review the offer. Allergan shareholders would receive $72 in cash and 0.83 shares of Valeant for every Allergan share they own.

Valeant has twice raised its bid to buy Allergan as part of its strategy to become one of the world’s five biggest drugmakers. Allergan has rejected those offers and Valeant has responded by taking its attempt hostile. A special meeting to remove most of Allergan’s current board could come before the end of the year, Valeant said yesterday in a conference call outlining its plan.

Valeant shares fell less than 1 percent to $118.43 at the close in New York. Allergan rose 1.2 percent to $162.41.

Allergan holders have until 5 p.m. New York time Aug. 15 to tender their shares, though Valeant can extend the offer.

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