Neither Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) nor Bill Ackman’s Pershing Square Capital Management is giving up the fight for a merger with Allergan, Inc. (NYSE:AGN). BMO Capital analysts believe that it’s “impressive” that Ackman was able to garner 33.8% shareholder support for the special meeting. He seeks to replace most of Allergan’s board members and push through a merger with Valeant.

Valeant offer to AGN shareholders

Allergan’s bylaws create barriers

In a report dated Sept. 9, 2014, analyst Alex Arfaei notes that Allergan’s bylaws offer a “myriad of significant and ongoing administrative hurdles,” according to commentary from Glass Lewis. Because of those hurdles, he thinks that the roughly 34% support likely understates how much shareholder support there really is for the special meeting and the merger with Valeant.

Pershing Square claims that “a substantial majority” of shareholders who held Allergan, Inc. (NYSE:AGN). stock before Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX)’s bid support the merger.

VRX AGN Deal

Valeant will probably succeed

Allergan has scheduled the special meeting for Dec. 18, and Arfaei expects to see even more investors whose investments are driven by events to become involved in the Botox maker and support Valeant’s offer. As a result, he thinks that Pershing and Valeant have a 50% to 60% chance of forcing an acquisition of Allergan by Valeant.

In order to win the first step, they need at least half of Allergan, Inc. (NYSE:AGN). shareholders to vote in favor of replacing most of the drug maker’s board of directors. Once the board is replaced, it’s expected that Allergan management will begin negotiating with Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX).

VRX AGN pro-forma Analysis

Valeant could acquire Allergan within six months

Because some of the early regulatory steps are currently underway, the analyst believes the acquisition could close by the end of the first quarter of 2015 or the middle of the second quarter. And if the deal closes by the end of the first quarter, they estimate it to be between 20% and 22% accretive in 2016 and 2017.

He maintained his Outperform rating and $165 per share price target on Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX).