Allergan Says Its View On Valeant's Offer Remains Unchanged

(RTTNews) - Botox maker Allergan, Inc. (AGN) on Monday reiterated its decision on the hostile acquisition offer made by Canadian drug maker Valeant Pharmaceuticals International Inc. (VRX, VRX.TO). Allergan stated that its view that the offer is grossly inadequate and substantially undervalues Allergan remains unchanged.

"There has recently been significant and potentially distracting market speculation regarding Allergan, so, as the Company's Board of Directors, we think it is important to reiterate our unanimous perspective. Our conclusion that Valeant's offer is grossly inadequate and substantially undervalues Allergan remains unchanged," Allergan said in a statement issued by its board.

Allergan added that Valeant's offer does not appropriately reflect the underlying value of its assets, operations and prospects, including its industry-leading franchises of global scale and its projected growth opportunities.

In order to back its decision to reject Valeant's offer, Allergan states that its already leading growth trajectory has been accelerated since Valeant's initial offer made in April.

Since then, Allergan has reported outstanding sales growth in the second quarter of 2014, being the greatest quarterly increase in the company's 64-year history. Its has also reported continued operational momentum in its businesses, driven by strong double digit sales growth and several regulatory approvals around the world.

The company has also maintained its longstanding and consistent track record of delivering superior result that beat analysts' expectations and continues to raise its quarterly guidance.

Further, the company has put in place a restructuring and value creation plan that will significantly reduce costs by about $475 million annually relative to Allergan's prior strategic plan.

It also expects to deliver double digit sales growth during the next five years, and expects to generate compounded annual adjusted earnings per share growth of more than 20 percent, which translates into $10.00 per share in 2016.

Allergan's strategic plan will also generate considerable free cash flow of about $18 billion during the period, which provides significant upside to current earnings per share targets.

"As a Board, we have a longstanding track record of consistently acting in the best interests of Allergan's stockholders by delivering superior performance as prudent stewards of capital. Thus, while we will not comment on market rumors or speculation, we remain focused on our shared commitment to enhancing stockholder value," Allergan's board added.

Valeant Pharma along with billionaire investor William Ackman's hedge fund Pershing Square Capital Management, L.P. made a hostile bid on April 22 to acquire Allergan for $46 billion in cash and stock, but the offer was rejected by Allergan. Pershing Square is the largest shareholder in Allergan with a 9.7 percent stake.

In May, Valeant Pharma sweetened its bid for Allergan to about $53 billion in May, but that offer was again spurned. Allergan has called Valeant Pharma's business model unsustainable and said that a deal with Valeant Pharma would hurt its research and development program.

In Tuesday's regular trading session, AGN is currently trading at $177.09, down $0.91 or 0.51% on a volume of 38,157 shares.