New York, NY, United States (4E) – Allergan Inc. said it rejected on Tuesday an increased $53bn offer from Valeant Pharmaceuticals International Inc. and investor William Ackman and said it does not consider entering into acquisition talks.
Valeant’s combined cash and stock bid largely undervalues Allergan’s prospects for growth, according to the Irvine, Calif. based maker of Botox. Allergan described Valeant’s business model as “unstainable” and said Allergan shareholders are interested in owning Valeant stock.
Meanwhile, Valeant said that Allergan is spending too much on research and development of drugs and said the tie-up of pharmaceutical firms would allow Valeant to reduce costs and increase sales. Valeant acquires companies with existing treatments in markets where it sees opportunity and reduce drug development costs.
Two weeks ago, Valeant twice raised its bid for Allergan in just a matter of days, with the latest proposal coming in at around $52.7bn in cash and stock, or $179.25 per share. Valeant had also hinted an additional $25 per share, depending on the future revenue of Allergan’s eye treatment that is currently on the developmental stage.