Valeant's and Pershing Square's team bid for Allergan Inc., with a bidder and an activist working together to build a toehold to support a hostile takeover, is turning into sort of a weird textbook for The Future of Mergers & Acquisitions. But one longstanding, obvious textbook lesson is that, if you're a board, and someone makes a hostile bid for your company, you say no. Today Allergan said no: And perhaps it isn't. But, again, they'd say that no matter what. If you think that a takeover is not in the best interests of stockholders, you say no. 1 If you think it is, and you want to do a deal, you still say no: The best way to negotiate a higher price is by playing hard to get. "Interesting, but we want a higher price" does not give you much negotiating leverage; once you admit you're willing to be bought it's hard to walk away over price. The trick is to say no consistently until the moment you sign the merger agreement. 2