Allergan Seeks Acquisition Of Its Own

Jul 10 2014 | 6:14am ET

In an effort to stave off a hedge fund-backed hostile takeover bid, Allergan Inc. is looking at an acquisition of its own.

The pharmaceutical company’s CEO said yesterday that investors have urged him to seek out a sizeable acquisition. David Pyott told The Wall Street Journal that, with $14 billion in future free-cash flow and access to debt markets, Allergan has more than enough money to pull off a deal.

Among the targets under consideration are companies based outside of the U.S.; such a deal could offer Allergan a tax break.

Pyott did not say whether any talks with targets were underway.

Pyott is seeking to stymie a $53 billion offer for Allergan from Valeant Pharmaceuticals International, which is working with Pershing Square Capital Management. Valeant has launched a hostile tender offer and Pershing Square a proxy contest to oust a majority of the Botox-maker’s board.

Allergan has insisted that Valeant’s deal significantly undervalues it, and has sharply criticized what it calls Valeant’s unsustainable strategy of acquisitions and price increases. But the pressure has forced Allergan to rethink its own strategy; Pyott said the company was considering a large share buyback or special dividend to return capital to investors.

Earlier this week, Bloomberg News reported that Allergan planned to shelve unpromising drugs it is working on and to overhaul its management incentive program in an effort to cut costs.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...

 

From the current issue of