WHEN: Today, Wednesday, September 24th
WHERE: CNBC's "Squawk on the Street"
Following is the unofficial transcript of breaking news from CNBC's David Faber. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000313386.
All references must be sourced to CNBC.
DAVID FABER: WE ARE DELVING INTO THE SOAP OPERA THAT IS ALLERGAN AND VALEANT AND A LOT OF OTHER COMPANIES AS WELL. THIS MORNING WE CAN TELL YOU THAT SALIX PHARMACEUTICALS, A COMPANY I HAVE PREVIOUSLY REPORTED ON, AND TOLD YOU THAT ALLERGAN IS IN TALKS TO ACQUIRE, HAS ANOTHER POTENTIAL SUITOR NOW IN THE NAME OF ACTAVIS. SOURCES FAMILIAR WITH THE SITUATION INDICATE THAT IN RECENT DAYS ACTAVIS HAS REACHED OUT TO SALIX, INDICATING ITS INTEREST IN ACQUIRING THE COMPANY. I WANT TO STRESS THESE ARE EARLY STAGE DISCUSSIONS BETWEEN THE TWO COMPANIES. THEY HAVE NOT GOTTEN FAR DOWN THE ROAD THERE IN CONTRAST TO THE ALLERGAN/SALIX DISCUSSIONS WHICH HAVE BEEN GOING ON SERIOUSLY FOR WEEKS. BUT ACTUALLY, ACCORDING TO PEOPLE WHO KNOW WHAT IS GOING ON TELL ME HAVE SLOWED IN RECENT DAYS. AND SORT OF HIT SOMETHING OF A ROAD BLOCK. BUT AGAIN, ACTAVIS, WHICH HAD PREVIOUSLY, YEAH, ABOUT A MONTH AND A HALF AGO BEEN TALKING TO PFIZER AT LEAST BRIEFLY, OR GOTTEN APPROACHED FROM PFIZER ABOUT A DEAL, BUT THAT DIED A LONG TIME AGO, IS ACTIVELY IN PURSUIT – EARLY STAGE OF SALIX AND HAS HAD SOME DISCUSSIONS ABOUT A POTENTIAL DEAL. THE SYNERGIES THERE MANY PEOPLE SAY FAR HIGHER THAN THOSE THAT ALLERGAN MIGHT BE ABLE TO REALIZE IN A SALIX TRANSACTION. REMEMBER, FOR ALLERGAN TO BUY SALIX, THAT WOULD MOST LIKELY DEAL A DEATH BLOW TO VALEANT'S CONTINUED PURSUIT OF THAT COMPANY. HOWEVER IF ACTAVIS WERE TO EMERGE AS VICTORIOUS IN A PURSUIT OF SALIX, THAT WOULD CHANGE THE ENTIRE COMPLEXTION OF ALLERGAN AND VALEANT. LET'S GO BACK TO ALLERGAN AND VALEANT NOW BECAUSE WE CAN ALSO GIVE YOU THE MOST RECENT CORRESPONDENCE BETWEEN THOSE TWO COMPANIES INVOLVING THE CONTINUED OF COURSE BATTLE THEY ARE GOING THROUGH. VALEANT HAVING SENT A LETTER A COUPLE OF DAYS AGO EXTENDING AN OLIVE BRANCH TO THE COMPANY AND HAVING THAT OLIVE BRANCH ESSENTIALLY SNAPPED IN ITS FACE BY ALLERGAN. IN A LETTER FROM ITS CEO MIKE PEARSON TO DAVID PYOTT, WROTE, "IT MAY BE TOO LATE BUT I THINK WE STILL HAVE AN OPPORTUNITY TO TAKE THE TEMPERATURE DOWN. COME TOGETHER. SEE IF WE CAN BEGIN A CONVERSATION THAT COULD LEAD TO EVEN MORE VALUE." SO HE CERTAINLY INDICATES HE MIGHT BE WILLING TO GO HIGHER IF WE CAN GET FRIENDLY WHILE STILL BEING THE RIGHT TRANSACTION. "I THINK YOUR SHAREHOLDERS AND OURS WOULD PREFER TO SEE A CONSTRUCTIVE DISCUSSION ABOUT VALUE, RATHER THAN MORE MUDSLINGING. PLEASE CONSIDER THE OLIVE BRANCH EXTENDED. I HOPE YOU WILL ACCEPT IT." ALLERGAN CEO SAME DAY AND THEIR CHAIRMAN SAID, "NO WAY. NO THANK YOU. INSTEAD OF CREATING AN UNRIVALED PLATFORM FOR GROWTH AND VALUE CREATION IN HEALTHCARE, AS YOU SUGGEST, WE BELIEVE THAT THE APPLICATION OF VALEANT'S BUSINESS MODEL TO ALLERGAN WOULD ERODE AND ULTIMATELY DESTROY CONSIDERABLE STOCKHOLDER VALUE." MAY POINT OUT THAT A SUBSTANTIAL NUMBER OF THEIR STOCKHOLDERS WHO DID CONSENT TO THAT SPECIAL MEETING ON DECEMBER 18TH, REMEMBER 39 PERCENT, THEY SAY, ACTUALLY, "THEY TOLD US THEY SHARE ALLERGAN'S PERSPECTIVES ON VALEANT AND ITS OFFER AND HAVE NO INTENTION OF VOTING IN FAVOR OF THE PROPOSAL TO REMOVE ALLERGAN'S DIRECTORS." THAT GIVES YOU THE LATEST LAY OF THE LAND. VALEANT COMES BACK AND SAYS, YOU'RE WORRIED ABOUT OUR BUSINESS MODEL? HERE'S A PREVIEW OF OR THRID QUARTER NUMBERS. LET ME SHOW YOU WHAT THOSE ARE GOING TO LOOK LIKE. YEAH, I'VE GOT THOSE TOO. BAUSCH & LOMB EXPECTED TO CONTINUE TO DELIVER GREATER THAN 10 PERCENT ORGANIC GROWTH, OVERALL SAME-STORE ORGANIC GROWTH AT VALEANT EXPECTED TO EXCEED 15 PERCENT IN THE THIRD QUARTER. VALEANT'S THIRD QUARTER RESULTS EXPECTED TO BEAT CONSENSUS ON REVENUE AND BE BETTER THAN GUIDANCE ON CASH EPS, ORGANIC GROWTH, RESTRUCTURING CHARGES. EXPECT CONTINUED STRONG DOUBLE-DIGIT SAME-STORE ORGANIC GROWTH IN THE FOURTH QUARTER. BUT WILL GET A LOT MORE ON THE 20TH.
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