Canada’s Valeant Pharmaceuticals Inc. (VRX) is set to sweeten its bid for Botox-maker Allergan Inc. (AGN) by nearly 10%, the Wall Street Journal reported Wednesday, citing people familiar with the situation.
The WSJ said Valeant, whose bid has the support of activist investor William Ackman but has been resisted by Allergan’s management, will raise its offer for a third time, by $15, to $191 a share. That would value the company at around $56 billion, making it one of the biggest takeover deals this year.
The new offer would be a little over 2% above Allergan’s closing share price Tuesday. Its shares are up more than 50% since Valeant first announced its interest in April.
The WSJ said Valeant is still working out how to balance the mix of cash and stock in its offer. The final cost to Valeant will depend on the price it negotiates for the 9.7% stake held by Ackman’s Pershing Square Capital Management LP.
The WSJ said the parties were counting on a positive market reception to Valeant’s third-quarter earnings on Oct. 20 to sauce the offer to Allergan shareholders a little bit more. Valeant’s own shares have risen 15% since early August.
Valeant had said in a regulatory filing two weeks ago it expected sales to have risen 15% in the third quarter but admitted the fourth quarter wouldn’t be as good.