Valeant To Raise Allergan Bid By $15 A Share: Reports

(RTTNews) - Canada-based Valeant Pharmaceuticals Inc. (VRX, VRX.TO) and hedge fund Pershing Square is reportedly in talks to boost their offer for Botox maker Allergan Inc. (ALGN) by $15 a share, according to the Wall Street Journal on Tuesday.

The new bid would value Allergan at about $191 a share or more than $56 billion, the Journal reported. The new offer comes at a time when Allergan's board is trying to strike other deals that would fend off Valeant's and Pershing Squares takeover attempts.

Valeant along with billionaire investor William Ackman's hedge fund Pershing Square had started a takeover battle in April by making a bid to acquire Allergan for $46 billion in cash and stock. Pershing Square is the largest shareholder in Allergan with a 9.7 percent stake.

Valeant later sweetened its bid to about $53 billion. However, Allergan repeatedly spurned the offers stating it grossly undervalued the company. Allergan called Valeant's business model unsustainable and said that a deal with Valeant would hurt its research and development program.

Allergan has agreed to unconditionally call and hold a special meeting of its shareholders on December 18, where William Ackman plans to rejig the Allergan board and push forward the takeover bid.

However, Allergan is in talks to buy Salix Pharmaceuticals Ltd. (SLXP) for over $10 billion in cash, a deal that would make Allergan too big for Valeant. Reports also indicate that Allergan has held talks about selling itself to Actavis Plc (ACT).

According to the Wall Street Journal's report, Valeant and Pershing Square were planning to raise its offer later this month before Valeant reported its earnings results. However, they were forced to sweeten its offer again after Allergan continues to look for other opportunities. An official announcement of increase in offer price is expected to come later this week, mostly by Thursday.

AGN closed Tuesday's trading at $186.20, up $3.08 or 1.68%, on the NYSE. The stock further gained $2.54 or 1.36%, in the after-hours trade.

VRX closed Tuesday's trading at $125.23, down $3.18 or 2.48%, on the NYSE. The stock, however, gained $1.77 or 1.41%, in the after-hours trade.