Allergan (AGN), desperately avoiding a hostile takeover bid from Valeant (VRX), which was spurred on by pitbull … er … hedge fund manager Bill Ackman, has decided that it will get overweight with acquisitions so its unwanted suitor might beat a retreat. However, it is trimming up in other areas by cutting costs, in a word, jobs, to get in fit condition to run away from Ackman and Valeant.
In the newest installment of the Botox soap opera, Allergan is rumored to acquire Salix (SLXP), less sexy than Allergan, because it makes gastrointestinal treatments rather than producing injectible youth serums. Shares of Salix soared to the highest level in 14 years, up 16% to close at $160.80. Meanwhile, Salix is getting together with Italian drugmaker Cosmo Pharmaceuticals. To make the saga even more simple to understand, Salix/Cosmo will relocate to Ireland because of the Emerald Isle’s now notorious (for those who want to keep U.S. companies in the States) tax advantages.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.
It is widely known that Bill Ackman is on the warpath for Allergan, mainly because he almost doesn’t let a week go by without sounding off about it. When there is a news story about his other obsession, Herbalife, the multi-level marketer he seeks to destroy, one can imagine that Allergan CEO David Pyott is giving a sigh of relief, yet knows in a few days, Ackman will issue yet another threat against Allergan. Ackman accused Allergan of pursuing a “scorched earth” policy to avoid the hostile takeover, and called for a special meeting of his fellow shareholders. Meanwhile, David Pyott is firm in resisting the takeover, because he thinks the bid undervalues the company and is concerned that Valeant will aggressively cut costs that will compromise Allergan’s business model. Cutting labor costs (i.e. jobs) is fine, Pyott is doing that to avoid the takeover. Cutting other things is just bad.
And so tune in again to see if Bill Ackman will win the fight to dominate the world’s Botox supply. Then he would be able to pursue his master plan of holding half of Hollywood hostage and make a hostile takeover bid for Goldie Hawn.
