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Will Allergan Buy Its Way out of a Takeover?

There has been no shortage of drama relating to Valeant Pharmaceuticals'  (NYSE: VRX  ) proposed takeover of Allergan  (NYSE: AGN.DL  ) . Valeant's proposed takeover is estimated to generate a potential $2.7 billion in cost savings for the combined company, in part by slashing Allergan's spending on R&D and administration (and presumably jobs in those departments).

In a move that bids to protect those jobs by keeping Allergan independent, Allergan's board immediately implemented a poison pill to prevent the takeover. Will the poison pill be enough to stop Valeant, especially given that the company is supported by Bill Ackman, whose firm owns over 9% of Allergan shares?

Speculation has swirled that Allergan might try another option -- an acquisition to boost its size beyond Valeant's ability and willingness to buy. Shire  (NASDAQ: SHPG  )  is a big potential target. Find out why in the video below.

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Michael Douglass

As the Motley Fool's Health Care Editor/Analyst, I focus on all things health care -- although my greatest interest is in the megatrends reshaping the American health care system, including the Affordable Care Act, Accountable Care Organizations, a shifting regulatory landscape, and the new drug discoveries fundamentally changing disease management and treatment.

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Related Tickers

12/31/1969 7:00 PM
AGN.DL $0.00 Down +0.00 +0.00%
Allergan, Inc. CAPS Rating: ****
SHPG $226.40 Down +0.00 +0.00%
Shire plc (ADR) CAPS Rating: ****
VRX $232.18 Down +0.00 +0.00%
Valeant Pharmaceut… CAPS Rating: ***