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Takeover drama for your mama: Cramer reveals

For those investors who are soap operas fans, look no further than the juicy stock market telenovela of Valeant's continued hostile takeover bid for Allergan.

Back in April, Valeant made an initial offer backed by big shot hedge fund manager Bill Ackman for the Cramer-fave stock Allergan. The drug company has since fought tooth and nail to stay independent, even as Valeant has upped its bid twice.

Yet again, like a bad date who just won't take the hint, Valeant sent Allergan a letter on Monday morning indicating it might be willing to raise its bid again. Jim Cramer discussed the future of Allergan and its take on Valeant, with the company CEO, David Pyott.

"We have a huge momentum in sales growth. With 17 percent sales growth this quarter, it was the very best quarter in all of our 64 years as a company," said Pyott.




David Pyott, CEO of Allergan, left, with Jim Cramer on Mad Money.
Source: CNBC
David Pyott, CEO of Allergan, left, with Jim Cramer on Mad Money.

Allergan's management has taken dramatic actions to restructure the business to keep Valeant at arm's length this year. That paid off as it reported Monday morning a 2-cent earnings beat off of a $1.76 basis, with management delivering upside guidance.

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Pyott provided further color on where the company's growth stems from, noting that its strength is derived from multiple products. Restasis has grown by double digits in volume; glaucoma products have added 11 percent; and its new product Ozurdex, for diabetic macular edema, has hit it out of the ballpark by bringing in almost $120 million in the first nine months on the market.

With all of this momentum, why doesn't Allergan just buy Valeant and beat them at their own game?

"I've often stated that we are only interested in buying companies that have a very strong organic growth outlook. And we would never want to water ourselves down," noted Pyott.

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