By Chelsey Dulaney And George Stahl
Pershing Square Capital Management LP on Tuesday formally
withdrew its request for a special meeting of Allergan Inc.
shareholders, another indication that the firm plans to end its
pursuit of the Botox maker.
The decision by the firm controlled by activist investor William
Ackman comes a day after Allergan agreed to be purchased by Actavis
PLC for $66 billion in cash and stock. Valeant Pharmaceuticals
International Inc., with the support of Mr. Ackman, had bid $53
billion for Allergan and had spent the past half-year trying to
close the deal.
Pershing Square, as part of Valeant's push, had sought to shake
up Allergan's board at a special meeting in one month. The
withdrawal request Tuesday is another signal that Valeant and Mr.
Ackman are ending their hunt for Allergan.
On Monday, Valeant had said it wouldn't be able to justify
matching or topping Actavis's price of $219 a share for Allergan,
though it said it would continue reviewing its options. The latest
bid from the Canadian pharmaceutical company was $180 a share, with
people familiar with the matter having said they were considering a
bump of $15 per share.
Valeant and Pershing Square are expected to profit despite
potentially walking away from the deal. The duo built a stake in
Allergan at an average price of about $128.12 a share, meaning they
are sitting on a profit of about $2.6 billion, according to
filings.
Valeant would be due to get about $440 million, while Pershing
Square stands to make about $2.2 billion at the deal price.
Separately on Tuesday, Actavis outlined new details of its
planned acquisition of Allergan, including plans to appoint two
Allergan directors to its board and a $2.1 billion breakup fee.
Allergan and Actavis expect a deal, which must be approved by
shareholders and regulators, would close in the second quarter and
be add to earnings within the first year. The combined company is
expected to have $23 billion in sales next year, more than 30,000
employees and a market capitalization of $128 billion, about 12
times Actavis's equity value just two years ago.
Actavis's board currently has 14 directors, including Chief
Executive Brent Saunders, according to the company's website.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com and George
Stahl at george.stahl@wsj.com
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