William Ackman, founder and CEO of hedge fund Pershing Square Capital Management, speaks at the Sohn Investment Conference in New York, May 5, 2014. Activist investor Ackman said on Monday that he recommends the shares of mortgage finance giants Fannie Mae and Freddie Mac because the companies have low liquidity risk.
Valeant and Bill Ackman have boosted their offer for Botox-maker Allergan.
The latest offer includes $72 per share in cash and 0.83 shares of Valeant for each share of Allergan owned by Allergan shareholders.
Following the announcement, shares of Valeant are up more than 3%, while Allergan is up more than 5.5%.
On May 28, Valeant raised the cash portion of its bid for Allergan by $10 to $58.30 per share. Valeant and Ackman also held a lengthy webcast outlining the merits of their deal .
Allergan has previously rejected Valeant's overtures, formally rejecting the first offer on May 12.
On May 27, Allergan filed a presentation outlining its concerns regarding Valeant's business model.
Ackman and Valeant's latest offer also includes a new wrinkle involving Ackman forgoeing all cash considerations to take its part of the deal completely in Valeant stock.
Valeant will host another webcast on Monday, June 2, at 8:00 am ET.
The full press release:
- Cash of $72.00 per share and 0.83 Shares of Valeant stock
- Contingent Value Right for DARPin of up to $25.00 per Share in Value
- Pershing Square agrees to forego all cash and accept 100% of its consideration in Valeant stock using an exchange ratio determined based on yesterday's closing stock prices of AGN and VRX
- Pershing Square will receive $20.75 per share less consideration than other AGN shareholders, providing substantially more value and cash for other AGN stockholders
- Proposal contingent on good faith negotiations
- Conference Call and webcast to discuss proposal on Monday, June 2, 2014 at 8:00 am ET
LAVAL, Quebec, May 30, 2014 /PRNewswire/ -- Valeant Pharmaceuticals International, Inc. ("Valeant") (VRX) (VRX.TO) today announced that it is making an offer for Allergan, Inc. (AGN) under which each Allergan share would be exchanged for $72.00 in cash and 0.83 shares of Valeant common stock, based on the fully diluted number of Allergan shares outstanding. This offer is subject to prompt good faith negotiation of a merger agreement between Valeant and Allergan. Shareholders will continue to be able to elect cash and/or Valeant stock, subject to proration. Pershing Square, Allergan's largest shareholder with a 9.7% stake, has agreed to elect only stock consideration in the transaction and exchange their Allergan shares for Valeant shares at a 1.22659 exchange ratio, based on yesterday's closing stock prices of Allergan and Valeant, and receive no cash consideration.
Bill Ackman, CEO of Pershing Square said: "Early this morning, I called Mike and offered to give up $600 million of value to the other Allergan shareholders and exchange our shares for Valeant stock if Valeant were prepared to increase its offer to the other Allergan shareholders. We believe that our gesture to the other Allergan owners makes an extraordinarily strong statement about our belief in the long-term value of this highly strategic business combination. We are delighted that Valeant has agreed to step up for the benefit of all Allergan shareholders. We look forward to the Allergan board immediately entering into negotiations with Valeant and finalizing this transaction."
J. Michael Pearson, Chairman and CEO of Valeant stated: "We believe our revised offer provides enormous value to both Valeant and Allergan shareholders. We strongly believe that applying Valeant's operating philosophy, strategy, and financial discipline to a broader set of durable assets will continue to create substantial returns for shareholders over the short, intermediate, and long term. We are very committed to getting this deal done, and are now modifying our offer with the assistance of Pershing Square to increase the economics for all Allergan shareholders."
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