(Adds Valeant comment, share activity)
June 23 Allergan Inc on Monday advised
investors not to sell their shares to Valeant Pharmaceuticals
International which launched a hostile takeover
offer for the California-based Botox maker last week, saying it
was "grossly inadequate."
Allergan said its advisors Goldman Sachs & Co. and BofA
Merrill Lynch told the board on June 21 the offer was inadequate
from a financial point of view.
The recommendation was consistent with Allergan's previous
rejections of Valeant's $52 billion cash and stock offer. The
Canadian company and activist investor William Ackman, who owns
nearly a 10 percent stake in Allergan, made a joint bid to
acquire the company in April.
Allergan said in a statement that because of Valeant's
declining share price, the offer is now worth about $173.20 per
share, down from the $179.25 per share it reached on May 30.
It said that the offer undervalues its "industry-leading
position, financial performance, strong balance sheet,
exceptional management and growth prospects." Allergan
reiterated its goal to increase adjusted earnings by 20 to 25
cents per share and generate $14 billion in free cash flow in
the next five years.
Valeant on Monday posted on its website an eight-page
rebuttal to earlier criticism by Allergan, defending its
acquisition strategy, organic growth and performance of its key
"Allergan's rejection of Valeant's proposal is based on
beliefs and assumptions about our business that are not
supported by the facts," Valeant spokeswoman Laurie Little said
in a separate statement. "We are moving forward with our
exchange offer and remain committed to this value-creating
Valeant and Allergan shares dipped in New York by 0.6
percent and 0.3 percent respectively, in early trading. Valeant
stock has fallen about 11.5 percent since making its initial
offer for Allergan on April 22.
(Reporting by Caroline Humer in New York and Rod Nickel in
Winnipeg, Manitoba; Editing by Sofina Mirza-Reid)