valeant pharmaceuticals inte (VRX) Key Developments
Allergan Reportedly Approached Salix For Acquisitions
Aug 20 14
Allergan Inc. (NYSE:AGN) has reportedly approached Salix Pharmaceuticals Ltd. (NasdaqGS:SLXP) and at least one other company about a potential acquisition, as Allergan seeks to fend off a $53-billion hostile takeover from Valeant Pharmaceuticals International, Inc. (TSX:VRX). Allergan could strike a takeover deal with the company or another unknown party as early as next month, September 2014. Allergan has said it is eyeing acquisitions of its own.
U.S. Securities and Exchange Commission Probes Valeant Pharmaceuticals and Activist Shareholder William Ackman Bid for Allergan Inc
Aug 15 14
The U.S. Securities and Exchange Commission is probing whether Valeant Pharmaceuticals and activist shareholder William Ackman violated insider trading laws in preparing their joint takeover bid for Allergan Inc. The SEC, following its standard policy, declined to comment on the investigation. News of the probe echoed allegations of insider trading made by Irvine-based Allergan in a federal lawsuit it filed against Valeant, Pershing Square and Ackman on Aug. 1. Allergan wants the court to make Ackman give up a significant portion of the Allergan shares he bought, saying that his purchases were illegal because he had non-public inside information of Valeant's plan to make an offer directly to Allergan shareholders. Allergan declined to comment. Valeant's alliance with an activist shareholder took many analysts and investors by surprise, and some wondered early on whether it would pass legal muster. From February to April, Ackman amassed a 9.7% stake in Allergan, making his fund the company's large shareholder. He managed to skirt disclosure rules while doing so, by buying a large number of the shares in the form of derivatives known as "call options," which conferred the same ownership status on him as regular shares. Ackman has used his position as top Allergan stakeholder to assist Valeant in its takeover plan. He is currently attempting to get the requisite 25% of Allergan shareholders to call for a special meeting, which would allow for a vote on a motion to fire six of Allergan's nine board directors and replace them with people more sympathetic to the takeover proposal. Allergan is fighting fiercely to delay or avoid such a meeting. Its bylaws impose onerous reporting requirements on institutional shareholders before their holdings can be counted among the 25% needed to convene a meeting. And numerous observers believe that one of Allergan's objectives in filing the lawsuit is to postpone the meeting for as long as possible. Allergan has also been waging a ferocious public campaign to discredit Valeant's business model and financial reporting methods. That has been at least partially responsible for driving Valeant's stock down. That, in turn, makes the takeover offer less attractive to investors, since more than half the deal is denominated in Valeant stock. The offer was worth $48.7 billion at the market close on August 14, 2014, down from $54 billion May 30, when Valeant increased its offer for the second time in a week. Allergan's accusation of insider trading against Ackman and Valeant is based on its contention that they both knew, at the time of Pershing Square's share purchases, that the bid for Allergan would be taken over the head of its board and directly to the shareholders - a process known as a tender offer. Valeant and Ackman have denied this, saying they had intended for the merger to be a friendly one and only went hostile after Allergan's repeated rebuffs. Allergan argues in its lawsuit that the idea of a friendly merger was only a ruse, that Valeant and Ackman knew all along they would end up making a hostile offer. Two years earlier, Allergan had refused to engage in merger discussions with Valeant, so its management was "well aware in early 2014 that Allergan was not likely to be supportive of a friendly merger, and began plotting an alternate course," the complaint alleges. An initial hearing in the lawsuit is scheduled for August 20, 2014, when a judge will consider whether to put the case on a fast track. An SEC investigation, on top of the lawsuit, could cause delays. Some analysts think that would not augur well for Valeant's bid - and could compromise its deal-driven business strategy.
Allergan, Inc. Files Lawsuit in Federal Court Against Valeant Pharmaceuticals International, Inc. and Pershing Square Capital Management, L.P
Aug 1 14
Allergan, Inc. filed a lawsuit in the United States District Court for the Central District of California against Valeant Pharmaceuticals International, Inc., Pershing Square Capital Management, L.P. and its principal, William A. Ackman, alleging that Valeant, Pershing Square and Mr. Ackman violated federal securities laws prohibiting insider trading, engaged in other fraudulent practices, and failed to disclose legally required information. After careful consideration, Allergan decided to file the lawsuit in order to ensure that all of its stockholders have the opportunity to make decisions regarding their investment in the Company based on compliant, full and fair disclosures, and to ensure that any stockholders voting on corporate matters acquired their shares in accordance with the law. The Allergan Board of Directors is strongly committed to protecting the stockholder franchise and believes it is important that the rights of the company's stockholders not be infringed by the actions of one hedge fund that significantly profited by trading in Allergan securities while in possession of material non-public information regarding Allergan. Specifically, as the complaint alleges, between February 2014 and April 2014, Pershing Square purchased Allergan stock and securities then valued at over $3.2 billion from unknowing company stockholders while fully aware of Valeant's nonpublic takeover intentions, thereby securing for itself and depriving the selling stockholders of value appreciation worth approximately $1.2 billion upon Valeant's announcement of its initial offer on April 22, 2014. In its complaint, Allergan is seeking, among other remedies, a declaration from the court that Pershing Square and Valeant violated insider trading and disclosure laws, and an order rescinding Pershing Square's purchase of the Allergan shares it acquired illegally. Allergan reserves the right to seek additional remedies against all appropriate parties. The complaint alleges that Valeant, Pershing Square and Mr. Ackman, violated Sections 13(d), 14(a), and 14(e) of the Securities Exchange Act of 1934, which prohibit insider trading and require full and fair disclosure for stockholders in the context of proxy solicitations and tender offers, and the rules promulgated by the U.S. Securities and Exchange Commission under those Sections, including Rule 14e-3. Released demonstrably false and misleading proxy solicitation materials that misstate their relationship and intentions regarding a transaction and Repeatedly misstated the certainty of the proposed transaction and the value of the consideration being offered to Allergan stockholders, among other material facts information that is critical to Allergan stockholders in considering whether to deliver consents in favor of a special stockholder meeting, and whether to tender their shares to Valeant in an exchange offer. Allergan fully supports the rights of its stockholders to call a special meeting in accordance with the company's charter and bylaws, and therefore will seek expedition of the federal court's decision so that the company can quickly resolve this matter and continue focusing on delivering enhanced value to all of its stockholders.
Valeant Pharmaceuticals Provides Earnings Guidance for the Full Year of 2014
Jul 31 14
Valeant Pharmaceuticals provided earnings guidance for the full year of 2014. For the year, the company expects to range between $7.90 and $8.10 per share, down from a forecast it made in April for $8.55 to $8.80 per share. It also dropped its revenue forecast to between $8 billion and $8.3 billion, down from $8.3 billion to $8.7 billion.
Valeant Pharmaceuticals International, Inc. Reports Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2014
Jul 31 14
Valeant Pharmaceuticals International, Inc. reported consolidated earnings results for the second quarter and six months ended June 30, 2014. For the quarter, the company reported total revenues of $2,041.1 million against $1,095.7 million a year ago, up 86% driven by strong growth in almost all businesses, including a rebound in emerging markets in Europe, continued strong results in Asia, robust performance in the U.S. contact lens business and the U.S. Bausch + Lomb consumer businesses. Operating income was $355.1 million against $141.5 million a year ago. Income before provision for income taxes was $121.0 million against loss before provision for income taxes of $40.4 million a year ago. Net income was $122.0 million against $10.8 million a year ago. Net income attributable to company was $125.8 million or $0.37 per diluted share against $10.8 million or $0.03 per diluted share a year ago. Adjusted net income attributable to company was $650.6 million against $420.5 million a year ago. Adjusted operating income was $540.4 million against $431.4 million a year ago. Adjusted income before provision for income taxes was $546.2 million against $473.0 million a year ago. Total adjustments to net income attributable to company was $524.8 million or $1.54 per diluted share against $409.7 million or $1.30 per diluted share a year ago. Net cash provided by operating activities (GAAP) was $376.0 million against $305.1 million a year ago. Adjusted cash flow from operations was $500.2 million against $423.5 million a year ago. Diluted cash earnings per share were $1.34 against $1.01 a year ago. Adjusted total revenue was $2,050.3 million.
For the six months, the company reported total revenues of $3,927.3 million against $2,164.1 million a year ago. Operating income was $711.7 million against $258.5 million a year ago. Income before provision for income taxes was $125.8 million against loss before provision for income taxes of $95.2 million a year ago. Net income was $101.7 million against net loss of $16.7 million a year ago. Net income attributable to company was $103.2 million or $0.30 per diluted share against net loss of $16.7 million or $0.05 per diluted share a year ago. Adjusted net income attributable to company was $1,250.3 million against $825.7 million a year ago. Adjusted operating income was $1,034.2 million against $870.4 million a year ago. Adjusted income before provision for income taxes was $1,158.5 million against $943.0 million a year ago. Total adjustments to net income attributable to company were $1,147.1 million or $3.36 per diluted share against $842.4 million or $2.68 per diluted share a year ago. Adjusted total revenue was $3,971.7 million.