Allergan acknowledges revised, unsolicited Valeant proposal

Irvine, CA-Allergan has publicly acknowledged that Valeant Pharmaceuticals International, along with Pershing Square Capital Management, have made a second revised, unsolicited proposal to acquire all of the outstanding shares of the company.

The revised proposal includes a total of 0.83 of Valeant common shares, $72 in cash per share of common stock of Allergan, and a contingent value right related to DARPin sales.

The original proposal, which came in April, consisted of 0.83 shares of Valeant stock and $48.30 in cash. However, Allergan’s board swiftly rejected the offer.

Further distancing itself from Valeant’s proposal, last week Allergan filed an investor presentation with the Securities and Exchange Commission and posted the presentation to its website detailing its initial concerns about the sustainability of Valeant’s business model.

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The filing came after the company announced it had received a strong outpour of support for its rejection of Valeant’s proposal from its physician customers, their nurses, and office staff members, as well as from patient advocacy groups and medical associations.

More than 500 letters of support were sent to Allergan to express gratitude following the rejection, the company had said in a prepared statement.

“Allergan is extremely grateful for the hundreds of letters of support we have received from our customers during the past few weeks,” said David E.I. Pyott, chairman of Allergan’s board and its chief executive officer. “All of us . . . are touched that our customers have taken the time to write to tell us that our work has mattered to them and their patients, and to publicly share their support and encouragement for our company’s business model and our promising future.”

Along with the filing, Allergan retained two financial consultants and forensic accountants-Alvarez & Marsal and FTI Consulting-to evaluate concerns about the inherent value of Valeant’s pro-forma driven financial reporting.

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Nevertheless, Valeant made a counter offer late last week with a revised proposal, consisting of keeping the 0.83 shares of Valeant stock, but raising the original cash offer to $58.30.

“Our increased offer provides additional immediate value to the Allergan shareholders, . . . we are confident (Allergan) will view this offer . . . as one that merits your immediate engagement with us,” said J. Michael Pearson, chairman and chief executive officer of Valeant, of the revised offer. “We ask (Allergan) once again to enter into discussion with us promptly so that we can consummate this mutually beneficial transaction in a timely manner.”

In response to Valeant’s re-revised proposal, Allergan said it has yet to receive the offer from Valeant and Pershing Square, but when it does, the Allergan Board of Directors will review and consider it, and pursue action that the board feels is in the best interest of Allergan and its stockholders.

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