Pershing and Valeant Pharmaceuticals deal for Allergan approved

Noam Stiekema

The US court approved deal of Pershing Square Capital and Valeant Pharmaceuticals for Allergan. Earlier in October manufacturer of Botox complained to the court against the 9.7% share of Pershing Square Capital, which is claimed to be acquired violating the rules of insider trading. Pershing Square Capital and Valeant Pharmaceuticals convened meeting of shareholders in […]

Allergan

AllerganThe US court approved deal of Pershing Square Capital and Valeant Pharmaceuticals for Allergan. Earlier in October manufacturer of Botox complained to the court against the 9.7% share of Pershing Square Capital, which is claimed to be acquired violating the rules of insider trading. Pershing Square Capital and Valeant Pharmaceuticals convened meeting of shareholders in mid-December, at which shareholders will vote on the removal of part of the management under the leadership of Executive Director David Assumption. The both companies plan to appoint a more manageable guide. They have already won the support of 35% of shareholders for the meeting, but will need at least another 15% to win the vote against the current management.

In October the both companies proposed new offer – 4.50 billion USD higher than the previous one, which increases the assessment Allergan to 56 billion USD. If ingestion occurs at this price, it will be the largest corporate deal of the year and will surpass another transaction in the industry – the purchase of AbbVies by Shire for the price of 54 billion USD, which is not yet completed.

A possible merger of Valeant with Allergan would help the Canadian company, which in 2010 is located in the active period of acquisitions to become one of the top five players in terms of market capitalization in the sector by 2016, as are the ambitions stated of its chief executive Michael Pearson. This step represents the next movement in the pharmaceutical industry, which began in 2011 and reached its peak in April with the measures taken by companies such as Pfizer, GlaxoSmithKline (GSK) and Novartis. According to the agency in the last few months in the sector took place mergers and acquisitions worth 141 billion USD.

Meanwhile, just days after the “unwanted investor” Valeant Pharmaceuticals International and investor William Ackman said it may raise its bid for Allergan, a new candidate intends to submit a proposal for the acquisition of the maker of Botox. It is assumed that this is Actavis. Rumors that Actavis sought after experience in the summer to make another attempt to acquire, float in the space of about four weeks. The management obviously wants to avoid at all costs ingestion of Canadians. What extent this is economically justified, is not yet clear. Many analysts believe a merger with Valeant strategic correctly. But in case not, analysts and investors have the last word. And some of them seem to welcome a possible merger with Actavis. It is expected that the acquisition or merger with Allergan to be good as the shares of the maker of Botox and the winner of the securities in dispute it. So for those who have in their portfolio share of Actavis, rather than Valeant, it is better to support a slightly bad deal economically. Although small shareholders Allergan can not greatly influence the decision they get serious comfort. Who has invested in the company last year, has doubled their money and shares yesterday marked a new peak to 193.55 dollars a share. And that’s not all. Valeant has said it may offer 200 USD per share. According to various speculation of a merger between Allergan and Actavis transaction value would still be over 200 USD per share.

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