Shares of Allergan (AGN) could be valued at up to $350 to $360 a share in an acquisition, according to one portfolio manager, who advises holding onto the stock for now. Mark Dawson, Chief Investment Officer and portfolio manager at Rainier Investment Management, said he wouldn’t take profits on Allergan just yet. Allergan is one of the largest holdings in Rainier’s Large Cap Equity Fund, which is heavily weighted in the healthcare sector. Dawson said it’s not yet clear what will happen between Allergan and Pfizer (PFE), following news the two were holding merger talks. ‘It is early. It’s still not even 100% clear to me who would buy whom,’ said Dawson. ‘Initially it appeared that Pfizer would buy Allergan. But a key part of a combination would be the tax status of the company. With Allergan being domiciled in Ireland, having the lower tax rate. So I think that’s going to be an important part about whether this deal goes through or not.’ Dawson added that the potential deal could kick off another flurry of M&A activity in healthcare. ‘We do expect more consolidation,’ said Dawson. ‘If I had to think about what are good candidates it would be for promising, proven biotech products that can be acquired by larger companies, such as Pfizer, such as Bristol Myers (BMY) such as Merck (MRK), or even conceivably Johnson and Johnson (JNJ).
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