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BTIG: Valeant Must Sweeten Allergan Bid To More Than $200/Share

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Allergan's (NYSE: AGN) strong showing in its recent second quarter suggests an acquirer may need to offer "north of $200 a share," one analyst said Tuesday.

Valeant Pharmaceuticals' (NYSE: VRX) $53 billion unsolicited bid for Allergan was rejected last month. The bid equaled $72 in cash and 0.83 per share of Valeant stock for each Allergan share.

Valeant on Monday complained to regulators in the U.S. and Canada, claiming that Allergan had made false statements about sales of some Valeant products in an increasingly bitter takeover battle.

In addition to strong results, Allergan unveiled a $475 million restructuring plan that will cut 1,500 employees and 250 vacant positions.

BTIG's Sean Lavin said resulting savings and an improved outlook should boost Allergan's 2015 earnings to $8.30 per share and 2016 earnings to $10 per share.

"Valeant probably needs to raise it's bid in our opinion," Lavin said in a research note, in which he suggested a price of greater than $200 per share.

Lavin raised his target from $180 to $200 and maintained a Buy rating.

Allergan opened higher Tuesday, but closed down 0.41 percent at $170.43.

Latest Ratings for AGN

DateFirmActionFromTo
Sep 2014ISI GroupInitiates Coverage onBuy
Aug 2014Leerink SwannUpgradesMarket PerformOutperform
Jul 2014UBSUpgradesNeutralBuy

View More Analyst Ratings for AGN
View the Latest Analyst Ratings

Posted-In: btig Sean LavinAnalyst Color Earnings News Guidance M&A Analyst Ratings

 

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