Actavis Plc is near a deal to acquire Allergan Inc for an estimated $64 billion, a deal that would help the Botox maker rebuff the hostile advance of Valeant Pharmaceuticals International, said people that have knowledge of the deal.
A deal might be announced on Monday, said those same people. Actavis will play over $210 per share in stock and cash for Allergan. The bid includes a larger percentage of cash than the current offer from Valeant. The breakup fee is close to $2 billion.
The two companies had tried to narrow a difference of $3 billion between the amount Actavis wants to pay and what Allergan is asking.
Allergan was looking for $210 per share, while Actavis wanted the price nearer $200 per share.
The board of directors for both companies had planned to meet on Sunday night to work out the deal.
Allergan, which is based in Irvine, California, was up 1.2% in trading last Friday to $198.64, which gives the company a market capitalization of $59.3 billion.
Actavis was at $243.76 to end the week last Friday giving it a market capitalization of $65 billion.
This deal will give Allergan’s shareholders an alternative to the deal offered by Valeant, which said it was willing to pay up to $200 per share and has the support of the largest shareholder at Allergan, Pershing Square Capital run by Bill Ackman an activist investor
An Actavis spokesperson was not available for comment, while a spokesperson for Allergan did not answer e-mail or calls requesting information.
Part of the promise by Valeant to increases its bid price to $200 per share depended on the anticipated rise in price of the stock, the company announced last month.
Allergan wants to enter a deal prior to a December 18 investor meeting said those close to the situation. At that time, shareholders will be voting on Valeant as well as the proposal by Ackman to remove the directors at Allergan, with the idea of eventually replacing them with ones that agree with the offer from Valeant.
Valeant likely could find the money to match a $210 per share offer, but would not do that since it would leave the business with more debt that management wants.