Allergan in acquisition talks with Actavis

Allergan is said to be in active talks about a potential acquisition deal with Actavis, in a bid to fend off a hostile takeover from by Valeant, according to sources close to the action.

In an official filing, the firm – a California-based botox manufacturer – has confirmed that it is currently in discussions that could lead to merger negotiations, but has neglected to name the third party company.

Sources, that have asked Bloomberg to stay anonymous, suggested that the unnamed third party is Actavis.

Allergan has been trying to forestall a $54 billion (34.11 billion pounds) hostile takeover by Valeant – an offer it has described as “grossly inadequate”. It believes the Canadian pharmaceuticals firm will drastically downsize its research and development budget and use its cash flow to pay down debt that it accrued in previous mergers.

According to the anonymous sources, Actavis is unlikely to make a formal offer to Allergan unless it is certain the other firm’s shareholders would approve it.

In an interview earlier this week, Brent Saunders, chief executive officer of Actavis, declined to comment directly on the possible talks, but said: “Allergan is a terrific company with great assets and a great team of people.”