Valeant starts hostile takeover process for Allergan

Valeant Pharmaceuticals International Inc today began a tender offer to acquire the sahres of Botox maker Allergan Inc, the first move in its attempted hostile takeover of the drugmaker.

The company's $54-billion cash-and-stock bid depends on California-based Allergan waiving defensive conditions that kick in if any single entity gains 10 per cent or more of its stock.

It would be followed by an effort for the replacement of most of the board and force a merger with Quebec-based Valeant. Valeant had joined up with Bill Ackman, who heads hedge fund Pershing Square Capital Management LP and acquired a 9.7 per cent stake in Allergan to push the deal.

''This offer, together with Pershing Square's ongoing efforts to call a special meeting of Allergan stockholders, is part of Valeant's clear path to complete a transaction,'' Michael Pearson, Valeant's chief executive officer, said in a statement today.

Urging Allergan shareholders not to tender their shares, Allergan's board of directors said it would review the offer. The company's share holders would get $72 in cash and 0.83 shares of Valeant for every Allergan share they owned.

Valeant had twice increased its bid for the acquisition of Allergan as part of its strategy to become one of the world's five biggest drugmakers. The offers had been rejected by Allergan, to which Valeant responded by taking its attempt hostile.