Valeant Pharmaceuticals International Inc.’s share price down, ready to boost Allergan takeover offer to $200 per share

Valeant Pharmaceuticals International Inc. said in an official statement that it is prepared to raise its acquisition offer for Allergan Inc. According to the statement, Valeant is ready to offer at least $200 per share in order to get the support of Allergans board.

The Chief Executive Officer of the company, J. Michael Pearson, said in a letter to the other partys board, cited by Bloomberg: “To be clear, Valeant is prepared to improve its offer and provide value to your shareholders of at least $200 a share. We are confident that an increase in our stock price, and in consideration, will provide that value.”

According to Valeant, Allergan should be ready to start the negotiations before its shareholders meeting, which is scheduled to be held on December 18th. Allergan criticised the previous hostile takeover bid of Valeant, which was estimated to about $53 billion in cash and stock, calling it too low.

The current takeover offer of Valeant consists of cash and stock and values Allergan at about $179.22 per share, based on its closing price on October 24th, which was at $184.21. This gives Allergan a market capitalization of about $54.7 billion.

In response to Valeants statement, Allergan said that it would consider an increased bid. Valeant, on the other hand, demonstrated confidence in its own strength, reporting better-than-expected results and upgraded its projection.

As reported by Reuters, Valeants Chief Executive Officer also added: “Allergan would not be trading anywhere near where it is absent our offer, and our offer, even at Valeant’s current stock price, represents a very substantial premium.”

The third-quarter profit, reported by Valeant, amounted to $1.78 a share, excluding some items. Allergans board will hold a meeting on December 18th, at which stock owners will give their vote for replacing members of the board with people, who would support the deal with Valeant.

Valeant Pharmaceuticals International Inc. lost 0.18% to trade at CA$144.95 per share by 14:44 GMT, marking a one-year increase of 23.26%. The company is valued at CA$48.44 billion.