Today was a huge day in terms of acquisitions in the pharmaceutical sector. Valeant Pharmaceuticals Intl Inc. (NYSE: VRX), based in Canada has a new partner, in the form of Bill Ackman, who made a spontaneous $45.7 billion bid to buy Allergan, Inc. (NYSE: AGN).
Allergan is a well-known Botox producing company, if the bid is not matched then Valeant will become one of the five largest drug companies. This deal will make two medium size companies into one mega company with the expertise in eye and skin care.
Ackman has made a living in finding partners to make super companies; Ackman’s Pershing Square Capital Management is Allergan’s biggest shareholder with over 9%. In the bid, Valeant offered to pay $48.30 a share in cash and $0.83 of its common share for each Allergan share, valuing Allergan at $152.88 a share, a premium of over 7% to the company’s closing price on Monday.
This offer is over 30% higher than Allergan’s stock price on April 10 when Ackman’s ownership was bumped up to 5%. “This proposal represents an undeniable opportunity to create extraordinary value for both Allergan and Valeant shareholders by establishing an unrivaled platform with leading positions in ophthalmology, dermatology, aesthetics, dental and the emerging markets” said Valeant Chief Executive Michael Pearson.
Valeant has been in the limelight since 2010 due its spending spree, around this time last year Valeant purchased contact lens maker Bausch & Lomb Holdings.