|ValueAct Capital CEO Jeff Ubben|
A top Valeant ($VRX) shareholder isn't saying the company can't win its hostile $53 billion takeover battle for Allergan ($AGN). It's just saying it doesn't need to.
Though ValueAct Capital, the Canadian pharma's third largest shareholder with 5.7%, likes a potential Valeant-Allergan merger, CEO Jeff Ubben told Reuters he thinks a protracted bidding war might be too distracting.
"A year on the sidelines waiting for [Allergan] to do a scorched-earth sort of defense is a huge cost to Valeant," he said. He added that his company has faith in Valeant's standalone plan, predicting its stock--which closed Monday at $107.25--would rise to the $130 to $140 range within a year.
Allergan has so far vehemently rebuffed Valeant's attempts to buy it, prompting Valeant's partner, Bill Ackman, to attempt to force a special shareholder meeting. There, he hopes to overturn the California company's board and takeover defenses.
But Allergan hasn't made it easy for Ackman to call that meeting. Earlier this month, the company filed a lawsuit alleging that his hedge fund, Pershing Square Capital Management, colluded with Valeant to pick up shares as the Quebec-based drugmaker was preparing its tender offer. And while Allergan says it's seeking an expedited review, the litigation may not be wrapped up until 2015, BMO Capital Markets analyst David Maris said in a recent note to clients.
The way Ubben sees it, Valeant CEO J. Michael Pearson--ever the dealmaker--has other pickups he can make in that time. After all, the company boasts a low tax rate that could make it an attractive acquirer to other targets.
Valeant "has a rich pipeline of other business development opportunities," Ubben told the news service.
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