NEW YORK – U.S. Botox maker Allergan (IW 500/179) on Tuesday rejected for a third time a takeover bid from Canadian drugs maker Valeant (IW 1000/959), saying the increased offer still substantially undervalues the company.
Allergan's board of directors unanimously rejected the $53.5 billion offer from Valeant Pharmaceuticals International, backed by activist shareholder William Ackman's Pershing Square investment group.
"Valeant's revised proposal substantially undervalues Allergan, creates significant risks and uncertainties for Allergan's stockholders and does not reflect the company's financial strength, future revenue and earnings growth or industry-leading R&D," said David Pyott, Allergan's chairman and CEO.
On a buying spree in the past four years, the Canadian company first made an unsolicited cash-and-stock buyout offer on April 22, valuing Allergan at $45.6 billion.
Valeant then raised the offer to about $50 billion on May 28, and, after that was rejected, increased it again to $53.5 billion on May 30.
Irving, California-based Allergan charged that "Valeant's unsustainable business model relies on serial acquisitions and cost reductions, as opposed to top-line revenue growth and operational excellence."
On Wall Street, Allergan shares opened 0.5% higher at $165. Valeant shares gained 0.1% to $126.75.
Copyright Agence France-Presse, 2014