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Price to buy Allergan appears too high for B&L parent

Bausch & Lomb Inc.’s Canadian parent appears to have dropped its bid to mount a hostile takeover of Allergan Inc. after Allergan said it would accept another suitor’s offer.

In a letter to Allergan’s board last month, Quebec-based Valeant Pharmaceuticals Inc.’s chairman and CEO Michael Pearson said Valeant could be willing to go as high as $200 a share or more.

But after reports started appearing in multiple business publications Monday morning that Allergan is poised to accept a $66 billion, $210 a share offer from Actavis Inc., Pearson issued a statement saying the deal now looks to be priced out of Valeant’s range.

"We have seen the announcement that Allergan and Actavis have made, and while we will review any such agreement in determining our course of action, Valeant cannot justify to its own shareholders paying a price of $219 or more per share for Allergan," the Valeant CEO said.  

Since that statement’s release, Allergan and Actavis announced an offer for Actavis to acquire Allergan for $129.22 a share in cash along with .3683 of a share in Actavis, giving the transaction a total $219 a share value.  

Valeant launched a hostile takeover of Allergan, the California-based maker of Botox, in 2013 with a $72 a share offer.

At a public event earlier this year, Allergan executives predicted the company would not prosper under Valeant. They also accused Valeant of falsely pumping up Bausch & Lomb’s sales numbers.  

Pearson denied those claims.

“As a public company CEO, I cannot say that we’re growing 17 percent in the U.S. if we’re not,” he told the Rochester Business Journal in September.

Rebuffing Valeant’s successively higher offers, Allergan filed a court case last August seeking to halt the hostile takeover.

Earlier this month, a federal judge in California ruled Valeant could solicit Allergan shareholders’ votes at a meeting next month but only if it revealed some of its acquisition of Allergan shares might have skirted securities laws.
Valeant, acquired Bausch & Lomb in 2013, paying $4.5 billion and assuming $4.2 billion in   eye-care company debt.

After the deal closed, Valeant moved Bausch & Lomb’s corporate headquarters from Rochester to Valeant’s U.S. base in New Jersey. Around the same time, it eliminated several hundred Rochester jobs.

More recently, Valeant added 100 local jobs in a transfer of some eye-care company manufacturing to Rochester from Ireland. In September, Pearson promised to add another 140 Rochester jobs with the startup of a new product line.    

“We will remain focused on delivering strong organic results and evaluating acquisition opportunities as we always have: prudently, in a disciplined manner, and in the best interests of our shareholders," Pearson said Monday.

Valeant shares on Monday were trading at $136.78, up $2.57.  
(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.


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