The Botox company, Allergan, has consented to be bought by generic pharmaceutical maker, Actavis for $219 a share. This gets in the way of the hostile takeover attempts led by Valeant Pharmaceuticals and hedge fund man, Bill Ackerman of Pershing Square Capital Management. But it might be possible for Valeant to out-bid Actavis?
66 Billion? That’s a lot of Botox.
According to the sources, this take-over by Actavis, is worth $66 billion.
Who is Actavis?
In the past two years, Actavis has purchased Forest Laboratories and Warner Chilcott. Actavis’ CEO is Brent Saunders. He used to run Forest Laboratories. Actavis is headquartered in Dublin, Ireland and has administrative offices in New Jersey.
Who are the losers? Nobody?
Pershing Square Capital Management owns 9.7% of Allergan shares. Valeant indicated that it may not try to beat Actavis’s offer. Bill Ackerman and Valeant stand to benefit from the increased share price for Allergan; thus they wouldn’t lose either way.
This is a win-win-win for the three A’s: Actavis, Allergan, Ackerman. And it also seems to be a win for Valeant who will get 15% of Ackerman’s profits from the price increase in Allergan’s stock (which he owns nearly 10% of Allergan stock). I also think it will be a win for Botox injectors and consumers. Actavis will try to be more efficient with it’s administration of Allergan – with further cost cutting and unification of efforts. And they have pledged to continue to have research and development within the Allergan family of products. And most importantly in the end, I think the consumers (and doctors) will benefit. I feel that the Valeant/Allergan merger (Vallergant – I’ve called it), might have cut too many costs and we’d lose on research/development. Thus the new merger of Allergan and Actvis – there would be a better balance with continued research and developement. So it will be a 6 way win-win-win-win-win-win: Actavis, Allergan, Ackerman, Valeant, doctors/Botox-injectors, and patients. That’s how you do mergers! I certainly hope so. Time will tell, and I hope to be here to talk about it.
Ackerman/Valeant walks away from Allergan