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AbbVie's $84B planned Allergan deal survived several rejected offers

Months before AbbVie Inc. announced its planned $84.2 billion acquisition of Allergan PLC in June, the two companies' CEOs met to discuss strategy, leading to several rejected offers before the final deal.

SNL ImageAllergan CEO Brent Saunders
Source: Allergan

In a proxy statement released Aug. 12, Allergan revealed that its CEO Brent Saunders spoke with AbbVie CEO Richard Gonzalez in March "to discuss market speculation regarding a variety of potential strategic opportunities Allergan may be considering," at which point Gonzalez said AbbVie would consider exploring a transaction.

The first offer Gonzalez made to acquire the company came at the end of May for between $174 and $178.50 per share, which was 28% to 32% higher than Allergan's value at the time, according to the proxy statement. Saunders and Allergan's M&A committee said they would explore an improved offer.

Gonzalez extended a new offer for $184 per share, saying AbbVie could go as high as $186 per share to acquire Allergan.

On June 11, Saunders once again rejected the offer on behalf of Allergan's board, indicating that a contingent value right — allowing shareholders to gain additional shares — could sweeten the deal.

Gonzalez rejected the contingent value right option, but made the final offer of $188 per share, which consisted of about two-thirds cash and one-third in AbbVie shares — an offer that gained unanimous support from Allergan's board June 16.

Following financial and credit review, the companies announced the deal June 25, which came at a premium of about 44% at the time.