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Allergan boasted of strong sales growth and again raised its outlook, while Valeant continued to defend its business model and hinted at another raised buyout bid for Allergan that would potentially reach at least $200 a share.
The companies' latest salvos come just days before Thursday's record date for eligibility to vote in Allergan's December board election. Valeant and Pershing Square Capital Management--a top Allergan shareholder run by activist investor Bill Ackman--are seeking to vote out a majority of Allergan's board as the two have run into repeated buyout resistance from the Botox maker.
The jockeying also comes a day before the two sides meet in California federal court, where a judge will hear arguments over their dueling claims.
Allergan sued in August, arguing Valeant and Pershing Square violated federal securities laws when Pershing Square built its position knowing that Valeant would try to buy the company. Allergan is seeking to prevent Pershing Square from voting its 9.7% stake at the December meeting.
Pershing Square and Valeant have responded with counterclaims of their own, accusing Allergan of spreading false information in an effort to drag down Valeant's stock price and, with it, the value of the offer.
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Allergan has deemed Valeant's bid, worth about $53 billion in cash and stock, as too low and has repeatedly criticized Valeant's business model.
Valeant said Monday that it is prepared to raise its offer yet again while urging the company to negotiate. Valeant has argued its own shares are trading at low levels and suggested an increase in its share price would help support a higher bid.
"Allergan would not be trading anywhere near where it is absent our offer, and our offer, even at Valeant's current stock price, represents a very substantial premium," Valeant Chief Executive J. Michael Pearson wrote in a letter to Allergan, noting Allergan's shares were trading at $117 before Valeant's approach.
In response, Allergan said it would consider an increased offer if Valeant were to make one but added it believes the company's comments were a tactic to distract investors from its strong results.
Allergan has said it is considering an acquisition of its own in an effort to create more value for shareholders. In August, The Wall Street Journal reported Allergan had approached Salix Pharmaceuticals Ltd. and at least one other company about a potential acquisition. Analysts have said a deal by Allergan, if completed, could make the company prohibitively expensive for Valeant.
Allergan Chief Executive David E.I. Pyott said on Monday that the company is still exploring a strategic acquisition, but it also could implement a new share repurchase program instead. If the company were to pursue a deal, it would have to be announced in early December to give shareholders enough time to evaluate the transaction before the board election later in the month, Mr. Pyott said.
"We plan to deliver greater value to our shareholders," Mr. Pyott said during a conference call with analysts on Monday. "It could be through strategic transactions. It could be through other forms of capital activity in the form of a buyback."
In Monday's letter, Valeant pointed to its own better-than-expected results and raised outlook this month, which it said demonstrate the "true strength" of the business.
The Wall Street Journal had previously reported Valeant and Pershing were preparing to increase their bid by $15 a share, valuing the company at about $191 a share, or more than $56 billion overall.
Allergan, too, has issued positive long-term guidance. The company on Monday predicted earnings of $6.27 to $6.30 a share, after raising its outlook to $6.20 to $6.25 a share earlier this month.
Overall, Allergan posted a profit for the third quarter of $312.5 million, or $1.03 a share, up from $299.8 million, or $1 a share, a year earlier. Excluding items, Allergan posted earnings of $1.78 a share, up from $1.23 a year earlier.
Earlier this month, Allergan had projected $1.76 to $1.78 a share in earnings for the period. It had initially projected $1.44 to $1.47 a share.
Revenue rose 17% to $1.82 billion, above the $1.78 billion projected by analysts surveyed by Thomson Reuters.
Net product sales rose 17% to $1.79 billion. Specialty-pharmaceutical sales improved 14% to $1.52 billion. Botox sales rose 15% to $560.1 million.
(Liz Hoffman contributed to this article.)