Actavis Plans New Merger Approach for Allergan: Report
Actavis Plc (NYSE:ACT) plans to approach Allergan Inc (NYSE:AGN) again about a potential merger, as the Botox maker warms up to the possibility of a sale, people familiar with the matter said on Tuesday.
Allergan, which has repeatedly rejected offers from Valeant Pharmaceuticals International Inc, would consider a takeover proposal that values the company at above $200 per share, some of the people said.
Actavis, which held informal conversations with Allergan in recent months about a possible combination, would like to take a hard look at buying the company and could reach out to its management team as soon as this week to reiterate its interest, one of the sources said.
There has been no formal engagement between the two companies yet, the sources said, asking not to be named because the matter is not public.
Shares of Allergan closed at $186.20 on the New York Stock Exchange, valuing the company at nearly $54 billion. Actavis which closed at $243.39, has a market capitalization of roughly $64.5 billion.
Valeant's existing cash and stock offer for Allergan is valued at $178.60 per share as of Monday's closing price, or $53.6 billion based on shares outstanding.
Representatives for Allergan and Actavis declined to comment.
Actavis' continued pursuit of Allergan comes as the takeover target faces a Dec. 18 special shareholder meeting, at which top Allergan investor Pershing Square Capital Management hopes to replace a majority of the company's board.
Billionaire investor William Ackman's Pershing Square has teamed up with Valeant to pursue a takeover of Allergan, and is hoping to install new board members who could be more receptive to a takeover by the Canadian drugmaker.
Actavis, which regularly reviews potential acquisitions, considers Allergan as the best opportunity currently and is hoping to engage in friendly discussions, the sources said.
Industry executives have said Actavis would be a better cultural fit for Allergan because the companies' respective chief executives, Brent Saunders and David Pyott, believe in focusing on research and development, while Valeant CEO Mike Pearson is known for cost cutting.
A large part of Allergan's business is ophthalmology, an area that Saunders is familiar with after serving as CEO of Bausch & Lomb. Valeant acquired Bausch & Lomb last year.
(Reporting by Soyoung Kim and Nadia Damouni; Additional reporting by Caroline Humer; Editing by Richard Chang)