Quebec-based Valeant Pharmaceuticals says it will improve on its $47-billion US offer for Botox-maker Allergan next week.
It also plans to hold a "referendum" this summer to convince the U.S. company's board and management that Allergan shareholders want a merger between the two pharmaceutical companies.
Allergan has adopted a poison pill to fend off the hostile takeover by Valeant and Bill Ackman’s Pershing Square Capital. It has given existing shareholders the right to buy shares at a discount, a tactic that dilutes the stake already purchased by Ackman and Valeant and gives it time to consider the Ackman-Valeant bid.
Valeant did not say how it would improve the offer, but said it would not be an “all cash” deal.
Allergan, maker of eyecare and skincare products and of medical devices, has said the $47-billion offer is too low and has expressed concern about continued research spending if it is taken over.
The Laval, Que., company addressed those concerns today, saying the “Valeant and Allergan merger will be a powerful combination for all stakeholders, including patients, physicians and health care providers, employees and shareholders.”
Moving manufacturing to Canada
The company said it will find $2.7 billion of “synergies” if the deal goes through, including moving some of Allergan's manufacturing to Quebec and Manitoba.
Valeant defended its takeover of eyecare product manufacturer Bausch + Lomb, saying its “organic growth” is more than 10 per cent, since Valeant acquired the company.
“Our operating model will accelerate Allergan's growth outside the U.S.,” Valeant said in a news release.
It plans a May 28 conference call with company executives to try to convince shareholders to accept the takeover deal. Valeant plans to defend its innovation and R&D record during the call, as well as presenting a new offer.
"We have met with many, if not most, of their shareholders privately and they have all told us they want this deal to be done," Valeant CEO Michael Pearson told reporters after Valeant's annual meeting.
Pearson denied that Valeant is making Allergan's refusal to negotiate personal, declining to comment on co-bidder Ackman's assertion Monday that Allergan CEO David Pyott is blocking the deal because he could lose his job.
"We're not making this personal, this is all about business. It's all about what shareholders want. What's good for shareholders is how boards should be acting,” Pearson said.