Actavis plans to buy another pharmaceutical company, botox maker Allergan Inc. for at least $60 Billion in order to escape Valeant Pharmaceuticals International Inc.'s hostile offer.
The companies are trying to narrow a gap of about $3 billion between what Actavis wants to pay and what Allergan is asking.
Actavis and Allergan are trying to meet in the middle, trying to narrow a gap of about $3 billion between what Actavis wants to pay and what Allergan is asking, said two of the people, asking not to be identified discussing private information.
The maker of anti-wrinkle treatment Botox is seeking more than $210 a share while Actavis wants to pay closer to $200, said two of the people.
Actavis and Allergan will be able to finally seal the deal this month.
Botox producer Actavis is trying to win over Allergan so that the company could ward off an offer from Valeant Phramaceuticals in connivance with Pershing Square, Allergan's largest shareholder with 9.72 percent, amounting to a total of $53 billion.
The Actavis-Allergan deal would antagonize Valeant, maker of neurology, dermatology and infectious disease drugs and Pershing Square's offer.
"I don't think that Valeant can outbid Actavis," said John Schroer, sector head of U.S. health care at New York-based Allianz Global Investors, which owns shares of Allergan and Actavis.
Allergan resisted Valeant, calling its offer "grossly inadequate" and argues that Valeant will only use its research and development budget to pay their own debt acquired from previous ventures.
Allergan is trying to finish the deal with Actavis before its investor meeting on Dec.18 where its shareholders will finally vote on Valeant's offer.
Moreover, it is reported that Pershing's Bill Ackman will try to dislodge Allergan board members from their positions and replace them with people who will welcome and favour Valeant's offer.
