Valeant sweetens offer for Allergan

Valeant Pharmaceuticals International has sweetened its offer to buy Botox maker Allergan for the second time this week.

The Canadian drugmaker said Friday it will offer $72 and a portion of its stock for each Allergan share. That's up from an offer of $58.30 per share that Valeant extended Wednesday.

The latest bid could be worth more than $53 billion, based on the closing price for U.S.-traded shares of Valeant.

But it's contingent on Allergan engaging in a prompt, good-faith negotiation of a merger agreement, Valeant said.

Shares in Allergan, based in Irvine, California, jumped nearly 6 percent in trading Friday, while Valeant shares added 1.6 percent.

Earlier this month, Allergan rejected an offer of nearly $46 billion, saying it undervalued the company. On Wednesday, Valeant increased its initial bid, throwing in a contingent value right worth up to $25 per share, based on future sales of a potential eye treatment.

Allergan responded by issuing a statement saying it would consider the unsolicited, revised offer.

As part of Friday's offer, Pershing Square Capital Management, Allergan's largest shareholder, agreed to receive no cash if the deal goes through.

That amounts to forfeiting up to $600 million in value to other Allergan shareholders, said Bill Ackman, Pershing Square's chief executive.

"We are very committed to getting this deal done, and are now modifying our offer with the assistance of Pershing Square to increase the economics for all Allergan shareholders," said J. Michael Pearson, Valeant's chairman and chief executive.

Allergan did not return a call seeking comment Friday.

Allergan, which also makes the dry eye treatment Restasis, has said repeatedly it opposes a deal with Valeant, which it sees as having uncertain long-term growth prospects and a business model that creates a risk for Allergan shareholders.

It also contends Valeant has limited experience with "large, global scale products" and would cut research and development costs too much.

Valeant has said Allergan's analysis of its business is full of errors, adding its operating model would speed up growth for Allergan products, especially in developing markets.