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New York- Allergan, the US maker of Botox, on Monday rejected a takeover bid from Valeant Pharmaceuticals, saying it "substantially undervalues" the company and questioning the Canadian firm's long-term growth plan.
Allergan's board of directors unanimously turned down the unsolicited offer from Valeant, worth nearly $46bn, highlighting its significant risks.
"After careful review and consideration, our board of directors has unanimously determined that Valeant's unsolicited proposal substantially undervalues Allergan," said David Pyott, Allergan's chairperson and chief executive.
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The proposal "does not reflect the value of the company's leading market positions, sales and marketing foundation, industry-leading research and development efforts, as well as future revenue and earnings growth," he added.
In addition, the Irvine, California-based company, best-known for its Botox wrinkle treatment, said it expected earnings per share growth of 20 to 25% and continued double-digit sales growth.
The Allergan board determined that Valeant's proposal "creates significant risks and uncertainties for Allergan's stockholders and believed that the Valeant business model was not sustainable."
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Valeant Pharmaceuticals, backed by activist shareholder William Ackman, on 22 April proposed a stock-and-cash deal buyout valuing Allergan at $45.6bn.
Valeant said the acquisition would enable huge cost savings and create a leader in opthalmology, dermatology, aesthetics and other growing health fields.
"Allergan shares were down 0.3% and Valeant shares shed 0.8% in opening trade in New York.
