[May 28, 2014]
(Reuters) - Allergan Inc <AGN.N>
on Tuesday built its case with investors for rejecting a
$47 billion takeover offer from Valeant Pharmaceuticals
International, <VRX.TO>, saying the Canadian drugmaker
has overstated the possible savings from the deal.
The move comes one day before Valeant will hold a webcast in which
it has said it will raise its offer for Allergan.
In slides posted to its website, the botox maker laid out its
argument for rejecting Valeant's offer and said that the research
and development and tax structure savings would not materialize.
Valeant and activist investor Bill Ackman made an offer to buy
Allergan on April 22, which Allergan spurned.
Alvarez & Marsal and FTI Consulting, two third-party consultants,
reviewed Allergan's analysis and confirmed key components, Allergan
said.
The offer was $153 per share at the time of the bid. Investors are
looking for a price of $180 to $200 per share, according to an
investor survey last week.
Allergan said Valeant's low organic sales growth was driven by price
increases, that its acquired companies experienced market share
erosion and that Valeant lacked transparency in its financial
reporting.
"Valeant's business leaders will provide further clarity on our
historic, current and future operating performance and address
Allergan's inaccurate assertions about our business model at our
event tomorrow," Valeant spokeswoman Laurie Little said when asked
to comment on Allergan's presentation.
Wells Fargo analyst Lawrence Biegelsen said in a research note that
if Allergan rejects Valeant's new bid, it expects Allergan to then
announce new steps to increase its financial performance. That could
include a strategic acquisition, a large share buyback program or
cost cutting.
Allergan shares were off 1.6 percent at $164.33 while Valeant fell 3
percent to $129.54, both on the New York Stock Exchange.
(Reporting by Caroline Humer in New York; Additional reporting by
Rod Nickel in Winnipeg; Editing by Bernadette Baum and Lisa
Shumaker)
