Allergan Weighing Shire Bid Has Investors Worried About Deja Vu
(Bloomberg) -- Allergan Plc investors have been waiting for the drugmaker to make a bold move after the shares took a beating over the past year, but a potential bid for Shire Plc may not be the deal they wanted.
Chief Executive Officer Brent Saunders said on a call with investors in March that Allergan was “going to consider every option” to create value. But given the recent history of failed mega-mergers -- including Allergan and Pfizer Inc. in 2016 -- Cowen & Co. analyst Ken Cacciatore said a potential tie-up with Shire “evokes painful memories.”
While buying Shire makes sense strategically, splitting up Allergan’s business or even just taking a wait-and-see approach are options that would give management more control of the process, Cacciatore wrote in a note to clients. Even so, William Blair’s Tim Lugo cautions that “Shire’s availability may be too attractive for management at Allergan to pass up.”
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