Actavis Plc wants negotiations with Allergan, Inc. (NYSE:AGN) about a probable merger since the Botox manufacturer aims to grab this buying opportunity, according to reliable resources. In the past, Allergan has repeatedly declined bids from Valeant Pharmaceuticals Inc (NYSE:VRX).  The company, however, might consider this takeover bid as it will increase company’s share value to more than $200 per share.

Recent months have witnessed informal negotiations between Actavis and Allergan, Inc. (NYSE:AGN) on the possibility of a merger. However, till date there is no formal commitment between the companies, but this week Actavis is expected to put force behind the proposal and might approach its management team to convey its eagerness. Since Valeant and its partner William Ackman are considering an increase of about $15 per share in their offer, chances are that this might enhance the value of Allergan to $190 per share or more.  Valeant intended to announce a higher bid on Oct 20 but the value and timing of this bid might change.  Despite handling such moves from Valeant, Allergan, Inc. (NYSE:AGN) has still not considered other prospective buyers and is concentrating on finding additional areas of growth and internal cost reduction.

Serious interest shown by Actavis has further complicated the Valeant and Allergan takeover battle. Allergan, Inc. (NYSE:AGN) has already accused the Canadian drug maker Valeant’s and its investor Ackman of insider trading and has taken up the legal challenge.  Allergan’s value stands at more than $55 billion after its shares register 1.7 percent increase closing at $186.20 on NYSE.  Actavis with market capitalization of $64 billion closed at $243.39 per share.; whereas Valeant Pharmaceuticals Inc (NYSE:VRX) shares value declined by 2.5 percent closing at $175.94 with total market value of $52.8 billion. The company however is hopeful that its share value will significantly increase with the announcement of its earning in the next week.  Thus investors will make its new enhanced offer value well beyond $195 per share touching $200. Average share price of Allergan is estimated at $200 per share according to Thomson Reuters poll of 16 analysts.

A special shareholder meeting has been planned at Allergan on Dec 18 and its top investor Bill Ackman from Pershing Square Capital Management who is hopeful to place new board members with an aim to get their support towards the takeover bid from Canadian Valeant with whom Pershing Square has formed a team. Actavis has to face this management challenge for its acquisition of Allergan, Inc. (NYSE:AGN). Industry executives believe that merger of Allergan with Actavis is more suitable since their cultural environment is similar.  In addition, both companies CEOs, David Pyott and Brent Saunders, both care about R&D in contrast to Valeant CEO Mike Pearson who believes in cutting cost.

Allergan, Inc. (NYSE:AGN) has refused Valeant Pharmaceuticals Inc (NYSE:VRX) and Pershing Square bid on April 22^nd and announced cost cuts while convincing their shareholders that they will be better as an independent entity through additional acquisitions. But the shareholders are aggressively resisting this move fearing that large acquisitions would make Valeant Pharmaceuticals Inc much larger and costly.

Get Free Updates and Stock Alerts!

*We only send one email per week