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Allergan looks to Sanofi or J&J for acquisition

Posted on 30 April 2014

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Allergan has contacted companies including Sanofi and Johnson & Johnson to see if either would be interested in acquiring the Botox maker, said people with knowledge of the matter, as it explores its options after receiving an unsolicited $45.7 billion bid from Valeant Pharmaceuticals International Inc.

Allergan is holding early-stage discussions with both companies while it decides whether to seek an alternative to Valeant’s offer, said the people, who asked not to be identified because the matter is private. It isn’t clear if either company is interested though Sanofi and Johnson & Johnson are both considering their options, the people said.

Allergan hasn’t decided how to respond to Valeant’s offer, and is making the inquiries to see if a sale to a larger rival is possible, said the people. In addition to finding a white knight to merge with, Irvine, California-based Allergan’s choices include buying another company to make itself tougher to acquire and negotiating with Valeant.

News of the approach to Sanofi and J&J damped speculation that Allergan will seek to acquire Shire Plc (SHP) to fend off the Valeant bid, and shares of Shire fell in late London trading after earlier gaining as much as 6.2 percent.

Activist investor Bill Ackman, who is supporting Valeant’s effort, spoke with Allergan Chief Executive Officer David Pyott and lead director Michael Gallagher last week. Ackman told them that he wouldn’t look favorably on Allergan pursuing a deal with another company in order to derail Valeant’s efforts, one of the people said.

Another potential white knight for Allergan could be German manufacturer Bayer Investment banks have contacted Bayer to see if it has interest in Allergan, said another person familiar with the matter, though they added Bayer was focused on trying to win an auction for Merck & Co.’s over-the-counter medicines business.

Any potential suitor would have to show that its proposal would create more value than Valeant’s.

Spokesmen for Allergan, Sanofi, J&J, Bayer and Ackman’s Pershing Square Capital Management LP all declined to comment.

View the article at Bloomberg (link no longer available)

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