Valeant Proposes to Combine With Allergan for $48.30 in Cash and 0.83 Shares of Valeant Stock for Each Allergan Share.
Valeant Pharmaceuticals has submitted a merger proposal to the Board of Directors of Allergan under which each Allergan share would be exchanged for $48.30 in cash and 0.83 shares of Valeant common stock, based on the fully diluted number of Allergan shares outstanding.
Shareholders will be able to elect a mix of cash and shares.
The proposal represents a substantial premium based on Allergan's unaffected price of $116.63 on April 10, 2014, the day before Pershing Square Capital Management L.P. ("Pershing Square") crossed the 5% Schedule 13D ownership level and commenced its rapid accumulation program.
Allergan shareholders will own 43% of the combined company and thereby continue to participate in the expected value creation of the combined company.
Pershing Square, Allergan's largest shareholder with a 9.7% stake in Allergan, has agreed to elect only stock consideration in the transaction and intends to remain a significant long-term shareholder of the combined company.
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