This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Valeant, Ackman Join Forces in $45B Allergan Bid

NEW YORK (The Deal) -- Valeant Pharmaceuticals International (VRX) and activist investor Bill Ackman on Tuesday revealed the details of their combined hostile effort to acquire Botox-maker Allergan (AGN), a move that is the well-known insurgent's first hostile acquisition partnership and one that would bring together two mid-sized pharmaceutical companies if consummated.

Valeant, a Canadian pharmaceutical company, said Tuesday it offered to swap each Allergan stock for $48.30 in cash and 0.83 shares of Valeant common stock. People familiar with the offer say that its total value is roughly $45 billion.

Ackman's fund, Pershing Square Capital Management, a $13 billion activist fund, revealed late Monday that it had acquired most of a 9.7% Allergan stake for $3.2 billion. The stake, which is currently all in options, is the largest single investment ever made by the activist investor. It was made as part of a joint venture known as PS Fund 1 LLC with Valeant's U.S. unit, which contributed $75.9 million to the investment. Valeant is based in Laval, Quebec.

Valeant noted that the offer represents a substantial premium to Allergan's stock price of $116.63 a share on April 10, before Ackman disclosed his fund had acquired close to 10% of the company.

Valeant on Tuesday unveiled a powerpoint presentation explaining the rational for its offer to buy the Irvine, Calif.-based company. It suggested that a combined Valeant-Allergan would have $6.3 billion in sales, making it the second largest player in the global eye health industry after Alcon.

In the presentation, Valeant noted that Pershing has become Allergan's largest shareholder supporting the deal. It added that the insurgent fund has done "extensive due diligence" on Valeant and is committed both to getting a deal done as well as becoming a long-term shareholder of the combined company. In another Securities and Exchange Commission filing, Valeant said it would consult with Pershing Square before making any material decisions involving a business combination with Allergan.

According to people familiar with the situation, the groundwork for Ackman's Trojan horse stake in Allergan was laid when a former Johnson & Johnson (JNJ) executive introduced the hedge fund manager to Valeant. The discussion between the activist and the $42 billion market cap pharmaceutical company resulted in Valeant and Pershing Square forming their joint venture fund on February 9th, according to an SEC filing.

That co-bidding arrangement came after Valeant had been trying, for about a year-and-a-half, to get Allergan to come to the table and negotiate a friendly deal, according to industry observers.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs