CNBC’s Kate Kelly has the details on Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX)’s bid for Allergan, Inc. (NYSE:AGN), and why Bill Ackman is attracted to pharmaceuticals now.
Bill Ackman’s big bet on pharma
The first London Value Investor Conference was held in April 2012 and it has since grown to become the largest gathering of Value Investors in Europe, bringing together some of the best investors every year. At this year’s conference, held on May 19th, Simon Brewer, the former CIO of Morgan Stanley and Senior Adviser to Read More
we’re well into hour number two of this investor presentation when we heard from both. big ackman taking the stage for the second time since i’ve been here just as i walked out. he’ll be taking q&a in just a few minutes. a quick reminder on what this deal entails. it’s essentially a proposes cash and stock transaction in which every share of allergan would be received for cash as well as a large majority of a valeant shares, a lot of talk from michael pearson today who’s been successful in dlirg shareholder returns about the durability of his assets, the products, the fact there’s less of a patent cliff that this there is for many other similar companies. the emphasis on sales as opposed to more traditional areas like r & d. then we heard from big ackman. he made interesting points about why he stayed away from pharmaceuticals in the past, but why this deal was attractive to him. let’s take a quick listen. in pharmaceuticals before. why is that? because the typical pharmaceutical business, you have products constantly coming off patent, investing huge amounts of money on speculative r&d. price pressure, but then i learned about valeant. what we like is it fits our paradigm. a business with durable products and brands. the persistent cash flow we look for. reporter: so a lot of attractive points for bill ackman. he’s betting very big on this. 30% tied up in the combination of his investment in valeant, allergan.