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| Valeant CEO J. Michael Pearson |
Valeant ($VRX) can't make a deal for Allergan ($AGN) if it doesn't get shareholder support for a special meeting. That's where it hopes to overturn Allergan's board and its poison pill defense. But if you ask Valeant CEO J. Michael Pearson, his company is well on its way toward that goal.
The Canadian pharma is close to winning over the 25% of Allergan investors it needs to convene that meeting. Most of the Botox-maker's biggest shareholders suggest that they approve of Valeant's proposal, Pearson told The Wall Street Journal.
And if Valeant hits that 25%, "both sides know how this will come out," he said. Namely, Pearson expects his company's $53 billion buyout offer to go through.
Valeant still has a while before it can make that happen; right now, the company is waiting for a judge to decide whether the special meeting would trigger Allergan's poison pill plan, Pearson told the Journal. After that, the Quebec-based drugmaker will need to round up its share of support for the meeting, which could follow up to 120 days after Allergan sets a date.
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| Allergan CEO David Pyott |
In the meantime, Allergan could still be looking to strike its own deal, which could sway shareholders in its favor. As CEO David Pyott told Reuters this week, shareholders have asked that Allergan lift earnings and deploy capital through share buybacks or a hefty buyout. Now, the California-based company says it will hike its guidance come late July or early August.
"Our goal now is to give them most of what they want," he told the news service.
But if it's a deal for Shire ($SHPG) that Allergan wants, it may have to pony up quite a bit of money. Since Allergan last made a pass at the Irish drugmaker--an advance Shire immediately rebuffed--AbbVie ($ABBV) has made three plays of its own, each bigger than the last. A recent analyst estimate compiled by Bloomberg put Shire's price at $51 billion.
"We believe any offer for Shire will need to place significant value on its pipeline and sales growth," Guggenheim Partners analyst Louise Chen wrote in a note to clients, as quoted by MarketWatch. "This may further dilute Allergan shareholders' returns in the short-to-medium term."
- read the Wall Street Journal story (sub. req.)
- see the Reuters piece
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Special Reports: Pharma's top 10 M&A deals of 2013 - Valeant/Bausch + Lomb | The most influential people in biopharma today - J. Michael Pearson - Valeant | 20 Highest-Paid Biopharma CEOs of 2012 - David Pyott - Allergan