With the hostile takeover saga of Botox-maker Allergan raging on for months, the situation has become even more complicated, with Actavis jumping with a bid for Allergan, as reported by Reuters. It is either Actavis or activist, as in activist investor Bill Ackman, who owns a large stake in Allergan and has been trying to pressure management to succumb to an offer from Valeant, which CEO David Pyott says grossly undervalues his company. As if Pyott is implying there is a price that would be right, the Wall Street Journal reports that Valeant has raised its bid by $15 a share around $191 per share.
With so many suitors, it is no wonder Allergan’s share price shot up nearly 4%. The irony of this situation is that Allergan was not a struggling company when Ackman and Valeant set their sights on it months ago; usually activists get involved in companies that were struggling, and Allergan’s fundamentals were sound. Perhaps this is a bit of Wall Street theater to boost Ackman’s stake, since psychology often moves stocks more than numbers.