Here's a good one for you. Valeant is well-known as an outfit that largely scorns R&D, and cuts it whenever they buy someone. They do mergers and acquisitions to get the fruits of someone else's research instead. You know, sort of a mini-Pfizer. (If anyone at Pfizer is offended by that comparison, they should take a longer look in the mirror).
Right now, Valeant is trying to acquire Allergan, and no doubt they're going to do to them what they've done to everyone else they've acquired. One of the wasteful things that Valeant CEO Michael Pearson has said that he wants to cut immediately is the outrageous perk of Allergan's own golf course. He's made mention of it several times, as an example of how out-of-control the spending is there. Only problem is, as Ed Silverman points out here, is that Allergan doesn't have a golf course.
At a recent luncheon with analysts, however, Pearson was pressed for further details on expenses he would slash if the Allergan deal comes to pass. According to analysts who attended, Pearson repeatedly pointed to Allergan’s golf course as an example.
“Have you been to their headquarters? Have you seen their golf course? Yeah, they have a golf course,” Pearson said, according to an investor note from BMO Capital Markets analyst David Maris, who wrote that the Valeant chief executive repeated this assertion more than once.
But the Allergan golf course will not be on the list of items to be slashed, after all. Why? Allergan, which is best known for the wrinkle fighter Botox, insists that it does not own a golf course.
“For the record, we do not have a golf course or any interest in a golf course,” an Allergan spokeswoman writes us. “We are golf-course deprived.” She adds that the drug maker received several calls after the meeting from analysts seeking to verify the information.
But hey, if there's not a golf course, Pearson will no doubt find something else to cut if the takeover does in fact go through. His McKinsey training has served him well, and his machete is sharp. The prospect has Allergan going around ringing doorbells, asking if someone else would be interested in buying them. Anyone but Valeant. I can see why.