Allergan rejects Valeant's latest bid

Botox maker Allergan (NYSE: AGN) has announced that its Board of Directors has unanimously determined that Valeant Pharmaceuticals International’s (TSX: VRX) unsolicited exchange offer to acquire all outstanding common shares of Allergan is “grossly inadequate” and “substantially undervalues” the company.

The company said it creates significant risks and uncertainties for Allergan stockholders, and is not in the best interests of the company and its stockholders. Accordingly, the board strongly recommends that Allergan stockholders not tender any Allergan shares to Valeant.

Pursuant to the Valeant exchange offer, Allergan stockholders would exchange each share of common stock of the company for 0.83 shares of Valeant common stock and $72.00 in cash, or subject to proration, an amount of cash or a number of Valeant common shares with the implied value set forth in the exchange offer. The company noted that the implied value of the Exchange Offer is $173.20 per share, based on the closing price of Valeant's stock on June 20, which is substantially lower than the initial $179.25 per share implied value of Valeant's May 30, re-revised proposal, which also included a contingent value right that is not included in the Exchange Offer.