RLPC-Valeant nets $15.5 bln debt financing for Allergan buy

NEW YORK, April 22 Tue Apr 22, 2014 2:06pm EDT

NEW YORK, April 22 (Reuters) - Valeant Pharmaceuticals has lined up $15.5 billion in debt financing from Barclays and RBC Capital Markets to fund its proposed $47 billion purchase of Allergan Inc., the company said on Tuesday in a press release.

Valeant said that the committed financing would include secured bonds, unsecured bonds and bank debt. The new debt will have an interest margin of around 5.5 percent, subject to market conditions.

The new term loan is expected to include dollar and euro debt, banking sources said.

Canada-based Valeant detailed a proposal to buy the BOTOXotox maker for $48.30 per share in cash and 0.83 of its common stock for each Allergan share on Tuesday, which will give Allergan shareholders 43 percent of the combined company. [ID: nL3N0NE34X]

Allergan said that it intends to evaluate the unsolicited offer, and noted that it has not started discussions with Pershing Square, Allergan's largest shareholder.

Pershing Square, led by activist investor Bill Ackman, has agreed to elect only stock consideration in the transaction and intends to remain a significant long-term shareholder of the combined company, Valeant said.

The combined company will have about three times net debt to adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), approximately $28 billion in net debt, and post-synergy free cash flow of more than $6 billion a year, according to a letter to Allergan management included in Valeant's press release.

Barclays and RBC Capital Markets are acting as financial advisors to Valeant and Sullivan & Cromwell LLP, Skadden, Arps, Slate, Meagher & Flom LLP, and Osler, Hoskin & Harcourt LLP are providing legal advice to Valeant.

Kirkland & Ellis LLP and Davies Ward Phillips & Vineberg LLP are providing legal advice to Pershing Square.

Goldman Sachs and Bank of America Merrill Lynch are acting as financial advisors to Allergan, and Latham & Watkins is serving as legal counsel.

Valeant Pharmaceuticals is a multinational specialty pharmaceutical company that develops and markets prescription and non-prescription pharmaceutical products.

Allergan, is a multi-specialty health care company that develops and commercialises pharmaceuticals, biologics, medical devices and over-the-counter consumer products. (Additional reporting by Claire Ruckin in London. Editing by Tessa Walsh)

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