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Allergan's board has unanimously rejected the latest takeover bid from Valeant Pharmaceuticals, and the Botox maker said the offer isn't even worth talking about.
Shares of Allergan slipped Tuesday morning after the drugmaker announced its response to a bid valued at around $53 billion.
Allergan said the May 30 offer from the Canadian drugmaker and activist investor Bill Ackman's Pershing Square Capital Management still substantially undervalues Allergan Inc. and creates too much risk for shareholders.
"The Allergan (board) must seriously consider the many questions around the sustainability of Valeant's business model as they directly impact the total future consideration for our stockholders," Allergan Chairman and CEO David Pyott said in a letter to his Valeant counterpart, Michael Pearson.
Allergan has said that Valeant depends too much on acquisitions for growth. Allergan has also raised concerns about cuts that might be made to research and development funding if Valeant were to take over.
Valeant representatives did not immediately respond to requests from The Associated Press seeking comment Tuesday morning.
Allergan also said the deal doesn't offer enough value to warrant discussions between the companies. The Irvine, California, company has said repeatedly it opposes a deal with Valeant, which first went public with an offer in April.
The latest bid included $72 in cash and a portion of Valeant Pharmaceuticals International Inc. stock in exchange for each Allergan share. It totaled $179.25 per share based on the closing price of Valeant stock the day before it made the offer.
That's close to the $180-per-share level that some analysts said Valeant's bid would have to reach to grab the interest of Allergan shareholders.
That bid represented an increase from an offer Valeant and Pershing Square made a few days before that involved $58.30 in cash and the stock portion.
Ackman's Pershing Square holds a 9.7 percent stake in Allergan. He has said he will move to replace most of Allergan's board of directors as part of the battle for control of the company.
Shares of Allergan, which also makes the dry-eye treatment Restasis, slipped $2.10 to $162.05 shortly before markets opened. Meanwhile, U.S. traded shares of Valeant climbed 10 cents to $126.73.