Some analysts seem to see Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s bid for Allergan, Inc. (NYSE:AGN) as positive to neutral. However, most seem to agree that Allergan will put up a fight. And indeed, it is.
What analysts say about Valeant and Allergan
The Wall Street Journal collected comments from analysts at several major firms. Chris Schott of JPMorgan believes a merger of the two companies would be a “compelling transaction” and a “clear strategic fit” for Allergan, Inc. (NYSE:AGN). In fact, he thinks it would be difficult to find an offer that’s better than Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s offer. Analyst Seamus Fernandez agrees that the list of companies which might be able to make a competitive offer is short, possibly including only Nestle or maybe Novartis AG (ADR) (NYSE:NVS) along with Alcon.
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Sterne Agree analyst Shibani Malhotra believes that Allergan, Inc. (NYSE:AGN) will do everything it possibly can to keep Valeant Pharmaceuticals Intl Inc (NYSE:VRX) from taking it over. The analyst thinks Valeant’s offer may even spark more offers, possibly from suitors who would be a bit friendlier than Valeant could be.
David Steinberg suggests that Allergan, Inc. (NYSE:AGN) could fight back by acquiring another company or asset. He sees a purchase of either Jazz or Shire as being a positive for Allergan because it would provide a lower tax rate and both companies fit well with Allergan.
Allergan adopts shareholders’ rights plan
Late last night, Allergan, Inc. (NYSE:AGN) announced that if any “unapproved investor” acquires at least 10% of its stock, other shareholders will be able to buy shares at a discount. Activist investor Bill Ackman, who teamed up with Valeant Pharmaceuticals Intl Inc (NYSE:VRX) in an unprecedented move, has disclosed a 9.7% stake in Allergan. By putting the poison pill in place, Allergan aims to keep Ackman from significantly adding to his position.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) announced its unsolicited bid for Allergan, Inc. (NYSE:AGN) on Tuesday. The cash and stock offer gave a value of approximately $152.89 per share, based on Valeant’s Monday closing price.