Valeant Prepared To Improve Offer For Allergan - Update

(RTTNews) - Canadian drug maker Valeant Pharmaceuticals International (VRX.TO, VRX) Tuesday said it remains resolute in consummating a merger with Allergan Inc. (AGN) and plans to improve its offer.

The company will discuss next week, why it believes that its offer is substantially superior to an Allergan "go it alone" strategy.

In April, Valeant announced that it submitted a merger proposal to acquire Allergan for $48.30 in cash and 0.83 Shares of Valeant stock for each Allergan share. The offer valued Allergan at around $46 billion. Botox maker Allergan Monday rejected the unsolicited proposal from Valeant, stating that it substantially undervalued Allergan, creates significant risks and uncertainties for its stockholders, and is not in the best interests of the company and its stockholders.

Allergan said the proposal includes a large stock component, which the board believes is a risk for Allergan stockholders due to the uncertainty surrounding Valeant's long term growth prospects and business model.

Valeant said today that on a conference call on May 28, it would discuss why its proposal offers greater short, intermediate, and long-term shareholder value by managing Allergan's assets under Valeant's operating model.

The company is prepared to pay a full and fair price, but would remain financially disciplined.

''Traditionalists have questioned our operating model since we began our journey more than six years ago. We will provide further details about our operating model, business strategy, and transaction cost synergies, in addition to addressing the concerns raised yesterday by Allergan on its webcast,'' Michael Pearson, Chairman and CEO, of Valeant said in a letter to shareholders of Allergan.

''We will not stop our pursuit of this combination until we hear directly from Allergan shareholders that you prefer Allergan's "stay the course plan" to a combination with Valeant. I ask that all of you continue to provide us with your feedback,'' Pearson added.

VRX closed at $130.16 on Monday and VRX.TO settled at C$141.98. AGN closed at $159.72.