Several of Allergan’s largest shareholders have voiced concerns about the company making a major acquisition in an attempt to fend off a hostile takeover bid by Valeant Pharmaceuticals.
Allergan is in talks with Raleigh-based Salix Pharmaceuticals about a possible acquisition.
Jackson Square Partners and T. Rowe Price Group have both sent letters to Allergan’s board advising against making a deal before a Dec. 18 shareholder meeting where the Valeant offer is to be discussed, Bloomberg News has reported.
T. Rowe Price is Allergan’s third-largest shareholder, while Jackson Square is its eighth largest shareholder.
Allergan is reportedly considering making an all-cash offer for Salix, which wouldn’t require a shareholder vote. Buying Salix would make Allergan a more expensive acquisition target for Valeant and its partner, Pershing Square Capital Management.
Valeant and Pershing Square have made a $54 billion offer for Allergan, the maker of Botox.
In a report issued Sunday, Strene Agee analysts Shibani Malhotra and Austin Nelson gave a 55 percent probability that Salix will be acquired at $190 a share. Salix shares closed Monday at $155.78, down $5.99.
The analysts said that Allergan is likely to present a Salix deal as an alternative to accepting Valeant’s offer. Under such a scenario, Allergan and Salix would make a deal announcement soon in order to give shareholders time to weigh both offers, they said.
The analysts also see a 90 percent likelihood that federal regulators will approve Salix’s best-selling drug, Xifaxan, for the treatment of irritable bowel syndrome. If Xifaxan is approved to treat IBS, it could generate incremental sales of $628 million in 2018, according to Sterne Agee.
Salix announced earlier this month that the U.S. Food and Drug Administration is expected to rule on its new drug application by Feb. 28, 2015.