Allergan and Actavis merger rumours gather pace
In its longstanding battle to fend off a hostile takeover by Valeant Pharmaceuticals, Allergan has confirmed that an unnamed company – said by a source to be Actavis – has approached it about a deal.
“Our board has determined that premature disclosure with respect to the possible terms of any transaction might jeopardise continuation of any discussions or negotiations,” Allergan stated in explanation for playing its cards close to its chest.
Valeant and investor William Ackman made several bids for Allergan in the summer, with the final offer reaching $53 billion. However, Allergan’s board rejected the offer saying it undervalued the company and that it disapproved of Valeant’s business methods. Valeant has acquired six companies in the last two years in its ambitious aim to be in the top five pharma companies by the end of 2016.
In August, when Actavis made its initial overtures, Allergan was in discussions to acquire Salix Pharmaceuticals, a deal which could have helped to rebuff Valeant’s advances. Now, the Salix talks have come to nothing and Allergan seems to be open to further discussion with Actavis.
Actavis is worth about $64 billion and Allergan $57 billion, so jointly they would be too large for Valeant to acquire. Actavis cut a deal to buy Forest Laboratories in February for $28 billion and was named by analysts as a possible takeover target for Pfizer after its bid for AstraZeneca fell through earlier this year.
Allergan is best known for its injectable Botox, which is used against wrinkles but is also licensed for a range of medical conditions. Its large ophthalmology portfolio includes Restasis for chronic dry eye, and its drug DARPin, which is currently in phase II trials, could be a prize to rival Novartis’s Lucentis if successful.
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