After months of battling it out against Canadian drug firm Valeant and activist investor William Ackman, pharmaceutical giant Actavis looks set to acquire botox-maker Allergan.
The firms are to hold discussions this week to review the cash and stock terms already agreed on – with shares valued between $215 and $220 – according to sources familiar with the case, Reuters reported. That could see the deal close at over $65bn, marking the biggest pharmaceuticals buyout of 2014.
Allergan has shown reluctance to accept
either offer
Allergan has shown reluctance to accept either offer, arguing that Valeant’s tendency to buy out competitors and then reduce spending could negatively impact on its product development. The debate provoked a wider discussion in the industry over how much money should be invested into pharmaceuticals R&D.
Allergan even tried to sue Valeant and Ackman – manager of hedge fund Pershing Square Capital Management – for insider trading. The pair, whose interest in Allergan dates back to April, offered $200 per share in their latest bid. That would value the company at $53bn – significantly lower than the Actavis offer, although they could still raise the bid.
“I think Actavis is going to win,” University of Michigan business professor Erik Gordon told Reuters. “Ackman is going to be content to take his profit on his Allergan shares and go onto the next battle.”
Ackman revealed in April that he held a 10 percent share in the Botox company – meaning he will gain from either takeover.
The deal marks the latest in a string of buyout attempts in the industry, with Pfizer’s AstraZenica bid and Abbvie’s efforts to acquire Shire both falling through in 2014.
