Allergan responds to Ackman’s latest salvo
Takeover target Allergan Inc. is deflecting the latest claims from activist investor Bill Ackman and suitor Valeant Pharmaceuticals International Inc. in a messy and protracted takeover battle.
In court papers filed late Monday in U.S. District Court in California, Valeant and Mr. Ackman’s Pershing Square Capital Management claim the Botox maker’s chief executive tried to discredit Valeant by providing false and misleading information to its investors, failing to disclose the resignation of Allergan chief financial officer Jeff Edwards in a timely manner, and ignoring outside advisors’ input when he falsely called Valeant’s account “opaque” and “problematic.”
Allergan responded to the latest claims, which were previewed by Mr. Ackman last week during a speaking engagement in Toronto, saying they are “another blatant attempt by Valeant and Pershing Square to try to distract shareholders from the serious insider trading allegations Allergan has raised.”
The latest skirmish stems from a lawsuit filed by Allergan in August, which accused the hostile suitors of breaching securities rules in the days leading up to the hostile bid. Valeant and Pershing Square made counterclaims, which were amended Monday with the new information.
On Tuesday, the Allergan spokesperson said the firm stands by earlier statements “regarding the unsustainability of Valeant’s business,” and welcomes “a full hearing” on the matter.
“We believe there is no evidence that supports Valeant and Pershing Square’s counterclaims, and Allergan will defend itself vigorously,” the spokesperson said.
Mr. Ackman told reporters last Thursday that the “discovery” process in the lawsuit filed by Allergan had turned up emails and other documents his group would submit as evidence to back up their claims Allergan pursued a strategy to discredit their bid for the company and drive down Valeant’s share price.
He said the information would also likely be provided to regulators in the United States and Quebec, to whom Mr. Ackman’s group earlier complained about what they called a “persistent pattern of misleading statements.” They complained in particular about claims that sales were “stagnant or declining” at Valeant’s Bausch + Lomb unit.
Valeant and Pershing teamed up in April to make a hostile bid for Allergan. The bid was rejected by Allergan’s board of directors, along with a subsequent offer that values the company at around US$53-billion.
Mr. Ackman and Valeant pushed for a special meeting of shareholders, which has been called for Dec. 18. He told reporters Thursday he believes there is “enormous investor support to replace the board of directors of Allergan” at that meeting.
However, Allergan is attempting to obtain an injunction to stop Mr. Ackman from voting his shares in the company. He owns nearly 10% of Allergan stock.