Allergan Board Unanimously Rejects Valeant’s Unsolicited Takeover Bid

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IRVINE, Calif.—After consulting with its independent financial and legal advisors, the board of Allergan, Inc. (NYSE: AGN) unanimously determined that Valeant Pharmaceuticals International, Inc.’s (NYSE/TSX: VRX) unsolicited exchange offer to acquire all outstanding common shares of Allergan “substantially undervalues the company, creates significant risks and uncertainties for Allergan stockholders, and is not in the best interests of the company and its stockholders,” according to a statement released by Allergan on June 23, 2014. “The board strongly recommends that Allergan stockholders not tender any Allergan shares to Valeant.”

Also on Monday, Valeant posted a notice of “clarification on assertions made about Valeant’s business” in order to “refute misleading assertions made by Allergan,” according to a statement dated June 23, 2014, by Valeant. The notice is the latest in a series of links posted on the Valeant site related to the proposal.

In its latest proposal directly to stockholders on June 18, 2014, Valeant offered $72 in cash and 0.83 Valeant common shares for each Allergan share, or an amount of cash, or a number of Valeant common shares, all subject to proration, as reported by VMail. Allergan noted that the implied value of the exchange offer is $173.20 per share, based on the closing price of Valeant's stock on June 20, 2014, which is substantially lower than the initial $179.25 per share implied value of Valeant's May 30, 2014, re-revised proposal, according to the Allergan statement.

Valeant’s hostile takeover bid began in April when Allergan received an unsolicited proposal from Valeant to acquire all of Allergan’s outstanding shares for a combination of 0.83 of Valeant common shares and $48.30 in cash per share of Allergan’s common stock, as reported by VMail. That was followed by a series of subsequent “improved” takeover proposals that increased the bid offered by Valeant, all of which were rejected by Allergan, including this latest takeover bid.