Allergan, the maker of Botox, is preparing to formally reject the $46bn offer by rival Valeant Pharmaceuticals in a move likely to tee up a hostile takeover battle at the top of the US drug-making industry.
Allergan, which has been working with defense advisers for the past two weeks, could publicly reject the cash and stock offer as early as Monday, according to people familiar with the matter, writes Ed Hammond, US M&A correspondent.
The company is expected to raise concerns that Valeant would slash research and development as a reason for refusing the offer.
Allergan is also likely to hit back at Valeant for using stock to make up over two thirds of its total offer, according to people familiar with the matter.
A rejection would be a blow to Valeant and Bill Ackman, the activist investor who, owns a 9.7 percent stake in Allergan and teamed up with the drug-maker to launch the takeover attempt.
Allergan declined to comment on the process.
—By The Financial Times