Allergan Inc., the Irvine company that makes Botox, is urging shareholders to reject a buyout offer from a Canadian pharmaceutical firm.
Valeant Pharmaceuticals International Inc. has offered to buy all of Allergan's shares for a combination of cash and stock as part of a $53-billion unsolicited takeover.
The Canadian firm has offered to pay $72 in cash and 0.83 share of its stock for each Allergan share. Based on Friday's closing price, that would amount to $173.20 per share – about 5% higher than Allergan's Friday closing price.
Allergan's board has rejected two previous offers from Valeant, and it urged shareholders to do the same.
Allergan chief David E.I. Pyott said in a news release that the offer is "grossly inadequate, substantially undervalues Allergan and is not in the best interests of Allergan and its stockholders."
"The board strongly recommends that Allergan stockholders reject Valeant's exchange offer," Pyott said, "and prevent Valeant from taking control of Allergan at a price that does not appropriately reflect the underlying value of Allergan's assets, operations and prospects, including our industry-leading position and projected growth opportunities."
Valeant chief J. Michael Pearson said the merger would be best for both companies, and generate significant value for Allergan shareholders.