A $66 billion combination between Allergan Inc. (AGN) and Actavis PLC (ACT) was announced early Monday and the result is likely to be a win for activist investor Bill Ackman even if it isn't the combination the insurgent manager of Pershing Square Capital Management LP had been seeking.
Dublin, Ireland-based Actavis announced it was going to acquire Allergan for $219 a share in a deal it expects to close in the second quarter of 2015, according to a Monday statement. As part of the deal, Actavis will acquire Allergan for a combination of $129.22 in cash and 0.3683 Actavis shares for each share of Allergan common stock. The total transaction is valued at $66 billion based on Actavis' closing share price on Friday.
The deal trumps a hostile bid for the Irvine, Calif.-based target orchestrated by Canada's Valeant Pharmacueticals International Inc. (VRX) and Ackman, in a much-publicized effort that became public in April.
After Allergan rejected the deal multiple times, Valeant had suggested it could hike its unsolicited bid to at least $200 a share, up from roughly $180.50 a share. But folloing Actavis' offer, the Valeant CEO Michael Pearson said in a statement that the company could not justify to its own shareholders paying a price of $219 a share for Allergan. "We have seen the announcement that Allergan and Actavis have made, and while we will review any such agreement in determining our course of action, Valeant cannot justify to its own shareholders paying a price of $219 or more per share for Allergan," he said.