Ackman and Valeant team up to bid for Allergan in unusual pairing

Tuesday 22 April 2014 18.31
Allergan, the maker of Botox, continues to be courted by Canada's Valeant
Allergan, the maker of Botox, continues to be courted by Canada's Valeant

Activist investor William Ackman teamed up with Canadian drugmaker Valeant Pharmaceuticals International to make a joint run at buying wrinkle-treatment maker Allergan.

This is according to security filings last night.

The move to acquire Allergan, which is worth around $42 billion, is highly unusual as activist investors typically buy stakes and then agitate for strategic change, such as a sale of the company.

One source familiar with their plans said it comes after Valeant tried for over a year to court Allergan but was turned away.

Ackman and his $13 billion hedge fund, Pershing Square, have a long record in pushing companies to do his bidding, which could help Valeant buy Allergan.

Allergan and a spokeswoman for Pershing Square declined to comment.

Valeant, which has been on a buying spree and most recently acquired Bausch & Lomb Holdings, said that a merger with Allergan would create an "unrivaled platform for growth and value creation," and that it would soon finalise its proposal and then announce it.

A deal would bring together two mid-sized pharmaceutical companies with expertise in skin care and eye care products.

Allergan, which also has a lucrative portfolio of ophthalmic drugs to treat conditions such as glaucoma and dry eye, is larger by revenue, reporting $6.3 billion in sales last year. Valeant reported $5.8 billion in revenue last year.

Allergan's longtime CEO, David Pyott, is also an avid dealmaker who built Botox into a blockbuster by continuously testing it for new uses.