Valeant to bid for Botox maker Allergan
Shares in Valeant Pharmaceutical International Inc. (TSX:VRX) (NYSE:VRX) soared in after-hours trading in New York on Monday after the Montreal-based company announced it had teamed with activist investor Bill Ackman to make a bid for Botox maker Allergan.
Valeant said intends to propose a merger with Allergan using a combination of Valeant stock and cash.
The transaction size was not been disclosed, but Valeant said it expected the cash portion of the deal to be at least $15 billion.
In a separate filing, Ackman's Pershing Square Capital Management said it owns a 9.7 per cent stake in Allergan worth $4.1 billion. Ackman's stake would make a Allergan deal worth around $40 billion.
On the New York Stock Exchange, Valeant shares were up $11.48 or 9.11 per cent at US$137.49, after having risen $3.96 or 3.24 per cent to $126.01 in regular trading Monday. Allergan's stock (NYSE:AGN) jumped $30, or 21.13 per cent, to $172 in after-hours trading. It had closed up $8.08 or 6.03 per cents at $142.
Allergan's star product is Botox, the anti-wrinkle treatment. The company sold $2 billion in Botox last year, up roughly 12 per cent from the prior year.
Word of the latest takeover bid follows Valeant's blockbuster US$8.7-billion acquisition last summer of eye care company Bausch and Lomb.
CEO Michael Pearson said earlier this year that the speciality pharmaceutical company would continue to see acquisitions in hopes of becoming a global giant even as it was counting on anti-aging treatments and other aspects of its esthetics business to help drive profits.
The Quebec company's esthetic business, including lip fillers and laser devices to remove wrinkles and fat, grew more than 30 per cent in both the United States and Canada last year, while the market itself was expanding in at least the high single digits.
— With files from The Associated Press