Allergan, Inc. (AGN) Surges on Ackman, Valeant Takeover Interest

(Updated - April 21, 2014 4:38 PM EDT)

Shares of Allergan, Inc. (NYSE: AGN) are surging after-hours Monday on reports from the Wall Street Journal that activist hedge fund manger Bill Ackman is teaming up with Valeant Pharmaceuticals (NYSE: VRX) to acquire the company.

Mr. Ackman's Pershing Square Capital has built up a nearly 10% stake in the Botox-maker, which is worth about $4 billion, according to WSJ sources.

The offer would be a combination of cash and stock and Pershing Square would maintain a large stake in the combined company.

In a 13D filing shortly after the news broke, Ackman's Pershing Square confirmed Valeant currently intends to propose a merger with Allergan. The cash component of the deal is expected to total around $15 billion. Pershing Square reported owning a 9.7%, or 28,878,538 share, stake in Allergan.

Speculation suggests a total bid for Allergan could come in just north of $45 billion, or about $150 per share.

Shares of Allergan last traded at $170.50, or up 20% from Monday's close, on speculation Valeant will be forced to come up with a higher bid to seal a deal.

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