For Better or Worse, Bill Ackman Joins Big Pharma’s M&A Frenzy

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Source: Thinkstock

Source: Thinkstock

Activist investor Bill Ackman, who has recently taken a major role in Valeant Pharmaceuticals Intl Inc.‘s (NYSE:VRX) potential takeover of Allergan Inc. (NYSE:AGN), first approached Botox-maker Allergan Inc. last week with an unsolicited offer for the company, which was promptly denied; Valeant and Ackman first teamed up last month.

Now, it seems, Ackman would like to give some advice. The investor, who runs Pershing Square Capital Management, sent Allergan a letter in which he cautioned the company against taking another offer if it didn’t provide a better value than Valeant Pharmaceutical’s $47 billion bid.

“Even if Allergan were able to identify a transaction that offers higher cash value than the estimated value of the Valeant proposal at the time of the transaction closure we do not believe such a cash transaction would be necessarily superior to Valeant’s stock and cash offer,” Ackman wrote, per Reuters on Tuesday. “Today Allergan is in a good position to negotiate with Valeant. This may not always be the case.”

Previous to Ackman and Valeant’s courting, Allergan had been preparing for talks with Shire plc, about a potential acquisition, though Shire has actually refused previous offers from Allergan, according to Reuters. For his part Ackman claims that a Shire acquisition deal by Allergan would lack “strategic rationale,” and wouldn’t be “superior to the Valeant transaction.”

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