UPDATED: Allergan's next tug-of-war move: Attack Valeant's rosy Q3 forecast

Allergan ($AGN) may or may not bow to requests from some of its largest shareholders to wait on M&A until after December's special meeting. But in the meantime, it's continuing its barrage on predator Valeant's ($VRX) sales model, which it says will yield a tough Q4.

While Valeant's top-line estimates for the third quarter may look rosy, there's more there than meets the eye, Allergan said in its latest presentation to shareholders. Valeant's predicted 15% increase in quarterly sales depends on weak Q3 sales last year. Repeating that swell will be difficult next quarter, the Botox maker figures.

It's just the latest attempt by Allergan's board to turn its investors against the Canadian pharma's hostile bid. The directors want to make their case before the December meeting, when shareholders will vote on a new slate directors nominated by Valeant partner Bill Ackman. Allergan has attacked Valeant's growth prospects time and again, pointing the finger at CEO J. Michael Pearson's acquire, cut costs and repeat strategy.

But at least a few of Allergan's top-15 investors are intrigued enough by Valeant's offer to see what the meeting has in store. Over the past few days, shareholders such as T. Rowe Price Group and Jackson Square have urged Allergan to hold off on any buyouts that could thwart Valeant's offer

Jackson Square CEO Jeff Van Harte

"Completing an acquisition prior to the special meeting will all but eliminate Allergan's alternatives for creating value. Limiting options is not in shareholders' interests," Jackson Square CEO Jeff Van Harte wrote in a Monday letter to Michael Gallagher, Allergan's lead independent director.

Allergan and CEO David Pyott admit they've been scouting for a defensive pickup. According to CNBC, the company has been in serious deal talks with Salix Pharmaceuticals ($SLXP), and might be close to an agreement. Last week, news emerged that Allergan had rebuffed a bid from Actavis ($ACT), saying it was closing in on a $10 billion-plus takeover of the North Carolina-based Salix.

But speaking of Actavis, it could take care of T. Rowe and the gang's concerns itself. Rumor has it, Actavis is in its own discussions with Salix. And if those don't yield an acquisition, don't count Ackman out--if Allergan buys Salix, he'll sue "immediately," he said last week.

- see Reuters' take

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