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Allergan Board Unanimously Rejects Revised Unsolicited Proposal from ValeantIRVINE, Calif. --(Business Wire)-- Allergan, Inc. (NYSE: AGN (News - Alert)) ("Allergan" or the "Company") today announced that its Board of Directors, after consulting with its independent financial and legal advisors, has unanimously determined that the revised unsolicited proposal (the "Revised Proposal") dated May 30, 2014 by Pershing Square Capital Management, L.P. ("Pershing Square") and Valeant Pharmaceuticals International, Inc. ("Valeant") substantially undervalues the Company, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of the Company and its stockholders. "Valeant's revised proposal substantially undervalues Allergan, creates significant risks and uncertainties for Allergan's stockholders and does not reflect the Company's financial strength, future revenue and earnings growth or industry-leading R&D," said David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer. "Allergan has a track record of generating consistently robust results and value for its stockholders, and we continue to have strong momentum in our business. The investment community has recognized the revised long-term growth outlook Allergan provided on May 12, 2014 and appropriately raised valuations for a standalone Allergan. We do not believe Valeant's proposal reflects Allergan's growth prospects, nor does it offer sufficient or certain value to warrant discussions between Allergan and Valeant." "The Board is confident that the Company will create significantly more value for stockholders than Valeant's proposal. We look forward to updating stockholders on or around the time of our second quarter earnings announcement." Allergan has filed an updated investor presentation with the Securities and Exchange Commission ("SEC (News - Alert)") and posted the presentation under the "Investors" section of the Company's website with additional detail on the considerations behind the Allergan Board's rejection. The following is the text of the letter that was sent on June 10, 2014, to Valeant's Chairman and CEO, Michael Pearson:
June 10, 2014 Dear Michael: The Board of Directors of Allergan (the "Allergan Board") has received your letter dated May 30, 2014 in which Pershing Square and Valeant made a second revised, unsolicited proposal to acquire all of the outstanding shares of Allergan for a combination of 0.83 of Valeant common shares, $72.00 in cash per share of common stock of the Company, and a Contingent Value Right (CVR) related to DARPin® sales. With the assistance of its financial advisors and legal counsel, the Allergan Board carefully reviewed the revised proposal as well as your recent presentations. After thorough consideration, the Allergan Board has unanimously determined that your second revised proposal substantially undervalues Allergan, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of Allergan and its stockholders. In addition, we do not believe your latest proposal offers sufficient or certain value to warrant discussions between Allergan and Valeant. In reaching its conclusion, the Allergan Board considered a number of factors regarding Allergan's standalone business, including, among others:
As we have indicated previously, the Allergan Board has serious concerns about the large stock component of your proposal, and the recent presentations by both you and Pershing Square did nothing to address the issues we previously raised. The Allergan Board must seriously consider the many questions around the sustainability of Valeant's business model as they directly impact the total future consideration for our stockholders. Allergan has a track record of delivering consistently robust results and value for its stockholders, and we have strong momentum in our business. The Allergan Board believes that through continued innovation and marketing excellence, the Company will extend its track record of substantial, long-term organic growth. This is reflected in Allergan's premium trading multiple, which significantly exceeds Valeant's lagging multiple, as well as the revised expectations from the investment community for a standalone Allergan. We expect that our plan will generate double digit sales growth and earnings per share compounded annual growth of 20 percent, as well as approximately $14 billion in additional free cash flow over the next five years. This provides Allergan with financial flexibility, and the Allergan Board is confident that Allergan will create significantly more value for stockholders than Valeant's proposal. On behalf of the Board of Directors, /s/
David E.I. Pyott, CBE Goldman, Sachs & Co. and BofA Merrill Lynch are serving as financial advisors to the Company and Latham & Watkins, Richards, Layton & Finger, P.A. and Wachtell, Lipton, Rosen & Katz are serving as legal counsel to the Company.
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Important Additional Information STOCKHOLDERS ARE ENCOURAGED TO READ ANY COMPANY SOLICITATION STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge, copies of any solicitation statement and any other documents filed by the Company with the SEC at the SEC's website at www.sec.gov. In addition, copies will also be available at no charge at the Investors section of the Company's website at www.allergan.com.
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