Valeant ($VRX) may have raised its offer--twice--since Allergan ($AGN) spurned its first takeover proposal, but the Botox maker is still singing the same tune. Allergan's board has unanimously shot down Valeant once again, claiming its sweetened bid still undervalues the company. Valeant, however, won't take the rejection lying down.
The Canadian pharma will take its latest offer--a $53 billion proposal comprising $72 cash and 0.83 shares of Valeant stock per Allergan share--directly to shareholders, Reuters reports. The move follows a Tuesday statement from chief David Pyott that claimed the offer put forth by Valeant and activist investor partner Bill Ackman lacked enough value to even warrant discussions between the drugmakers.
While Valeant spokeswoman Laurie Little told the news service Allergan must come to the bargaining table in order to properly assess Valeant's offer, Pyott feels he's heard enough. His company's board considered factors like Allergan's standalone sales growth, R&D track record and pipeline prospects when determining it was better off solo, even at Valeant's revised price. Allergan's board "is confident that Allergan will create significantly more value for stockholders than Valeant's proposal," he wrote in a letter to Pearson.
As he's done more than once since the Pearson-Ackman team announced its acquisition plans, Pyott also laid into Valeant's M&A-focused business model, which always includes plenty of cost cuts. In his letter, Pyott criticized Pearson's SG&A and R&D cost-cutting targets, saying they "would destroy Allergan's long-term value."Bill Ackman
Valeant fired back, labling those comments "inaccurate and misleading." But it may not need Pyott and Allergan on board to get a buyout done. In a Monday interview with CNBC, Ackman said the company's top shareholders have already told him what it will take to seal the deal: "'Look, Bill, if you can get us $180 a share, we're going to sign on to this transaction, because we believe it makes sense,'" Ackman relayed. "'Make it easy for us. Get us the price.'"
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Editor's note: This story has been updated with comments from Valeant, as reported by Reuters.