A months-long pursuit of Allergan ($AGN) may be about to come to a close for Valeant ($VRX) and activist investor Bill Ackman--but not with the results they were hoping for.
The Botox maker is close to selling itself to white knight Actavis ($ACT), which has offered to pay more than $215 per share, the Financial Times' sources say. The two companies' boards are expected to meet to review a cash-and-stock takeover, The Wall Street Journal reports, with an announcement likely coming this week.
That doesn't mean Valeant and Ackman--whose deal plans are locked up in a proxy fight--are out of the game completely. The Canadian pharma could come back with a higher bid--something it's done many times since it set out to acquire Allergan this spring.
|Valeant CEO J. Michael Pearson|
But according to the FT, Valeant's not about to enter a bidding war. CEO J. Michael Pearson is a "very disciplined" bidder and will keep his own shareholders in mind when weighing a higher offer, a source told the newspaper. While Pearson has said Valeant is prepared to hike its bid past $200 a share, it's unclear how much higher the serial dealmaker would be willing to go.
While Valeant has been the one touting its goal to sit among the world's top-selling drugmakers, if Actavis does land Allergan, the buyout would create a company that rakes in about $23 billion a year in sales--vaulting it near the top 10 itself, the WSJ notes.
"This is going to be a Big Pharma," Sanford C. Bernstein analyst Ronny Gal told the paper.
But Pearson's pickup machine may have a Plan B. Last week, Ackman acquired an 8.5% stake in Pfizer animal health spinoff Zoetis ($ZTS), which he may use to pressure the company to sell itself to Valeant.
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