Merger Frenzy: Pfizer Commits to Britain, Allergan Rejects Valeant
In the latest news from the throes of pharma’s ongoing merger drama, Pfizer, Inc. (NYSE:PFE) has responded to earlier concerns raised by the British prime minister regarding the company’s commitment to investing in Britain long-term, and Allergan, Inc. (NYSE:AGN) has formerly rejected Canadian Valeant Pharmaceuticals Intl Inc.’s (NYSE:VRX) acquisition offer.
Valeant Pharmaceuticals, which has partnered with American activist investor Bill Ackman (who, coincidentally, currently owns a 10 percent stake in Allergan) in its pursual of Botox-maker Allergan, Inc. has been aggressive about expressing its desire for a takeover.
Allergan has consistently deflected Valeant’s approaches. Last week, Ackman even censured the company for initiating talks with other potential suitors rather than directly responding to Valeant’s overture. On Monday, Allergan officially rejected Valeant’s offer, stating that Valeant “substantially undervalues Allergan, creates significant risks and uncertainties for the stockholders of Allergan and is not in the best interests of the company and its stockholders,” according to The New York Times.
“Valeant’s model of cutting and slashing really doesn’t work for more than a very short period of time,” said Allergan CEO David Pyott during a conference call with investors on Monday, referring to proposed cost cuts which Pyott views as being too steep and unwise in the long run, and would prevent the company from delivering growth, which it would be capable of on its own.