NEW YORK – U.S. Botox maker Allergan (IW 500/179) rejected Monday a takeover bid from Valeant Pharmaceuticals (IW 1000/959), saying it grossly undervalued the company and questioning the Canadian firm's long-term growth plan.
Allergan's board of directors unanimously turned down the unsolicited offer from Valeant, worth nearly $46 billion, highlighting its significant risks, the company said.
"After careful review and consideration, our board of directors has unanimously determined that Valeant's unsolicited proposal substantially undervalues Allergan," Allergan CEO David Pyott said in a statement.
Valeant Pharmaceuticals International, backed by activist shareholder William Ackman's Pershing Square investment group, proposed a stock-and-cash deal buyout on April 22 valuing Allergan at $45.6 billion.
On the eve of the takeover bid, Valeant and Ackman disclosed that they established a joint venture to make the offer, with Ackman said that Pershing Square had acquired 28.9 million shares of Allergan, or 9.7% of the company.
Valeant, headquartered in Laval, Quebec, says the acquisition will enable huge cost savings and create a leader in opthalmology, dermatology, aesthetics and other growing health fields.
Under the terms of the proposal, Valeant would buy each Allergan share for $48.30 in cash plus 0.83 shares of Valeant, saying the bid represented a "substantial" premium to Allergan's valuation.
Allergan shares fell 1.0% to $159.65 and Valeant shares dropped 0.9% to $129.98% in late-afternoon trade in New York.
Copyright Agence France-Presse, 2014