By Anna Prior
William Ackman's Pershing Square Capital Management LP on Monday
called for a special meeting of Allergan Inc. shareholders in an
effort to unseat six of the Botox maker's board members.
A representative for Allergan didn't immediately respond to
requests for comment.
The efforts, disclosed in a regulatory filing, mark the latest
move in a takeover attempt by Valeant Pharmaceuticals Inc. and
partner Pershing, which is the largest Allergan shareholder with a
9.7% stake in the company. The Canadian pharmaceutical conglomerate
has so far been rebuffed by Allergan since it made its first public
offer in April.
On Friday, Valeant boosted its takeover bid for the second time
in a week, offering about $52.7 billion in cash and stock for
Allergan, partly thanks to Mr. Ackman, who agreed to take less for
his own Allergan shares. Irvine-Calif.-based Allergan said Friday
it would review the latest offer.
"We believe the market has spoken, and that shareholders see
substantial value in Valeant's revised proposal," Pershing said in
Monday's filing adding, "to date, the board has refused to engage
with Valeant in any way regarding a merger with Valeant."
Valeant had previously threatened a fight for board seats or a
hostile tender offer. Monday's filing didn't identify which six of
Allergan's nine directors Pershing is looking to replace.
In addition to calling for the removal of the board members,
Pershing urged Allergan shareholders to request that the company's
board "engage in good faith discussions with Valeant."
Pershing needs consent from shareholders of at least 25% of the
company's shares in order to hold the special meeting.
Pershing said many of Allergan's largest shareholders expressed
to Mr. Ackman their support of a merger between Allergan and
Valeant at a conference last week, and added that certain investors
had suggested they would be supportive of a deal if Valeant raised
its offer to $180 a share. The latest bid values Allergan at
$179.25 a share.
Since Valeant's bid for Allergan was first disclosed in April,
the companies have been engaged in a public war of words.
Valeant criticized Allergan's management for spending too
freely, particularly on research and development. Valeant, which
has promised that it would cut the combined company's R&D
spending by 69%, spends little on science, instead focusing on
buying established drugs and treatments and selling them through
its international network.
Allergan, meanwhile, has said Valeant's cost-cutting would
threaten future sales growth and R&D, putting the company at
risk. Allergan also questioned the stability of Valeant's business
model.
Write to Anna Prior at anna.prior@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires