Valeant presents exchange offer to Allergan stockholders

Valeant Pharmaceuticals announced it has filed an exchange offer for the common stock of Allergan to Allergan stockholders.

As per the offer, Allergan stockholders would be able to transfer each of their Allergan shares for $72 in cash and 0.83 Valeant common shares, or an amount of cash, or a number of Valeant common shares, with each case subject to proration, according to a press release from Valeant.

“We believe Allergan’s stockholders should have the opportunity to express their views and we are confident that Allergan’s stockholders will support this combination,” J. Michael Pearson, Valeant chairman and CEO, said in the press release. “This offer, together with Pershing Square’s ongoing efforts to call a special meeting of Allergan stockholders, is part of Valeant’s clear path to complete a transaction with Allergan.”

Specific cash and stock election amounts would be determined prior to the 5 p.m. EDT Aug. 15, 2014, offer expiration date. These amounts would be set such that the implied value of the elections would be the same, based on average closing prices of Valeant’s common shares during an averaging period described in the offering documents, according to the press release.

Conditions of the exchange offer include removal of various anti-takeover obstacles that the Allergan board has the unilateral ability to remove. The offer is also conditioned on Valeant shareholders’ vote to approve the issuance of Valeant common shares in the acquisition; the company will file a preliminary proxy statement in a special meeting of Valeant shareholders, according to the press release.