Tomahawk, WI 06/23/2014 (Basicsmedia) – Allergan Inc. (NYSE:AGN), the company that is the maker of the anti-wrinkle treatment known as ‘Botox,’ asked its shareholders to reject a takeover offer made to them by Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) to its shareholders. Allergan Inc.’s (NYSE:AGN) Board of Directors was advised by Goldman Sachs and Bank of America Merrill Lynch on June 21, 2014, on the offer being inadequate from a financial point of view.

The Board’s Viewpoint:

The Board has termed the takeover offer by Valeant as ‘grossly inadequate,’ and has, therefore, advised all its shareholders not to tender their shares as the offer undervalues the company.

Moreover, the Board of Allergan Inc. (NYSE:AGN) feels that the cost-cutting measures to be adopted by Valeant would limit the growth prospects of the company and would also decrease R&D, putting the company at risk.

The value of the latest offer made by Valeant on May 30 is $52.7 Billion in cash and Valeant shares. As per Allergan Inc. (NYSE:AGN), the current value of the offer at $173.20 per share, is less than the initial value of $179.25 offered on May 30, when the offer was made. The fall in value was a result of a decline in Valeant’s share price.

In addition to this, the initial offer included a contingent value right, which is absent in the latest exchange offer to shareholders.

Valeant’s Plans:

On April 22, Valeant had announced that it plans to cut costs equivalent to $2.7 Billion annually after its takeover. The company also criticized Allergan’s spending on R&D and said that it plans to bring down R&D expenses by 69% for the combined company after the takeover.

The offer by Valeant is set to be expiring on August 15, 2014 and could be extended by the company also.

Valeant is on its path to become one of the five biggest drug making companies in the world and has been acquiring a number of companies in the last two years. In 2013, it acquired Bausch & Lomb Holdings Inc. for $8.7 Billion and in 2012 it acquired Medicis Pharmaceuticals Corp (NYSE:MRX) for $2.6 Billion.

Allergan has plans to increase its adjusted earnings by 20-25 cents per share as well as to generate $14 Billion in free cash flow in the next 5 years.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.