Valeant makes bid to merge with Allergan

Allergan Inc. (NYSE:AGN) gained $21.65 (15%) to $163.65 on Tuesday after Valeant Pharmaceuticals International Inc. (TSX:VRX; NYSE:VRX) made public an unsolicited offer to merge with Allergan in a cash and stock deal that would value Allergan at about $47 billion based on 307.6 million shares outstanding as of Feb. 20. Under Valeant's proposal, Allergan shareholders would receive $48.30 in cash and 0.83 Valeant shares for each share held, which values Allergan at about $152.89 per share based on Valeant's close of $126.01 in New York on Monday, before the offer was made public.

The price would be a 31% premium to Allergan's close of $116.63 on April 10, before hedge fund Pershing Square Capital disclosed a 5% stake in Allergan. Pershing bought the shares through a newco -- PS Fund 1 LLC -- created by the hedge fund and Valeant. Pershing, which has about a 10% stake in Allergan and is the company's largest shareholder, said it will vote in favor of the deal. Allergan shareholders would own 43% of the combined company. ...