NEW YORK (The Deal) -- Canada's Valeant Pharmaceuticals International (VRX) on Tuesday said it plans to launch an exchange offer later this week to put its $54 billion hostile bid to acquire Allergan (AGN) before shareholders, as part of a broader effort to step up its effort to acquire the California-based drug maker best known as the maker of Botox.
The expedited effort comes after Allergan, based in Irvine, Calif., last week rejected Valeant Pharmaceutical's latest raised, unsolicited offer. That bid is backed by activist Bill Ackman's hedge fund, Pershing Square Capital Management LP, which set up a joint venture with Valeant and owns most of a 9.7% stake in the target.
The exchange offer can't be consummated unless the company removes its 10% poison pill. However, even if it fails -- as expected -- an exchange offer is a good way to gauge investor sentiment for a deal.
"We have a clear path to completion of a transaction; we will be patient since time is on our side," Valeant said in a Tuesday presentation. "We believe that shareholders should have the opportunity to express their views, and we are confident that both Allergan and Valeant shareholders will support this combination."
Valeant and Pershing had indicated previously that an exchange offer was in the works. However, more details were provided Tuesday.
At the same time as Valeant tries for shareholder support for its hostile exchange offer, Pershing will be seeking consents to call a special shareholder meeting for investors to vote on removing a majority of Allergan's board.