Allergan and Valeant Rally on News of Potential Three Way Deal With Pershing Square

Shares of Allergen

and Valeant Pharmaceuticals

are moving higher, gaining 18 percent and 10.7 percent respectively after rumors the former, with the help of Bill Ackman, will acquire the latter for $45 billion, with one third being cash. The official hostile bid is expected by Tuesday. Ackman's Pershing Square has reported a 9.7 percent beneficial ownership in Allergan, which includes call options. Pershing plans to buy $400 million of Valeant's Allergen stake at a 15 percent discount, and may have the right to end the pact if Valeant does not make hostile bid before May 2. The deal is expected to create $25-$30 per share worth of synergies.