Analysts See Allergan Bid of over $180, Possibility of "Hostile" Bid

Bernstein analyst Aaron Gal reported that Valeant Pharmaceuticals International, Inc.'s VRX offer for Allergan Inc. AGN should be in the $190.00 per share range. Gal reported that Valeant should offer $190.00 per share cash or an option of part of the deal in cash. The analyst added if Valeant is willing to take on higher debt, the company could get 25 percent of Allergan shareholders to take equity. Bernstein sees Valeant delaying a counter offer to May 28 to find additional financing. The analyst remarked that a cash and stock deal is a “self-fulfilling prophecy” contingent on the deal being regarded as a gain for Valeant and an increase in the company's offer. Bernstein reported current trading suggests that investors are skeptical that a deal will close. In a report on Monday, Citi analyst Liav Abraham commented that he sees Valeant “significantly” raising its bid, including the cash part of the offer. Citi sees an offer price of over $180.00 per share, with a good chance of the bid going hostile. Shares of Valeant traded as high as $132.15, up 3.88 percent, on Tuesday. Allergan shares closed at $159.70 on Monday and are currently trading at $161.68, up 1.24 percent.