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Buyout buzz: Allergan made a pass at Shire before Valeant came calling

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Allergan's Irvine, CA, headquarters

Before it started getting unwanted attention from the takeout artists at Valeant ($VRX), Allergan ($AGN) made buyout overtures of its own to Shire ($SHPG), Reuters reports, getting little interest from the Irish drugmaker.

According to Reuters' sources, Allergan made its pitch in the past few months but never made it into serious negotiations. Shire, which commands a market cap of roughly $31 billion, is made all the more valuable for its nationality, as forgiving Irish tax policies have continued to lure Big Pharma to the delight of investors.

Now Allergan has become a target in its own right, this week getting an unsolicited $47 billion proposition from Valeant and activist investor Bill Ackman. The company has adopted a poison pill strategy, threatening to dilute its shares if Ackman looks to increase his nearly 10% stake in the company in an effort to rebuff the R&D-averse Valeant.

Allergan CEO David Pyott

And while the Shire talks may be dead, Allergan's current predicament may convince it to try once more. The notion of a Shire buyout illustrates just how eager Allergan CEO David Pyott has been to execute a big buyout, as well as the scope of his ambitions. Pyott told FierceBiotech back in January that he could easily spend $10 billion on new acquisitions. Shire would take much more than that. And analysts have already suggested that Allergan can shake Valeant loose by buying either Shire or Jazz Pharmaceuticals.

Unsurprisingly, none of the companies involved is commenting on the rumors.

Meanwhile, the industry's big week of moon-shot M&A talk marches on, as the latest report follows multibillion-dollar deals between GlaxoSmithKline ($GSK), Novartis ($NVS), Eli Lilly ($LLY) and, on the med tech side, Zimmer ($ZMH) and Biomet. And a weekend dustup pegging Pfizer ($PFE) as a potential suitor for AstraZeneca ($AZN) has grown legs, spurring the imaginations of analysts and investors who see better living through megamerger.

- read the Reuters story

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