Valeant, Pershing go hostile in bid for Allergan

Abandoning plans for an informal shareholder referendum to pressure Allergan management into a deal, Pershing Square and Valeant are planning to call a special meeting to replace the Allergan board.

On a call with analysts on Monday, both companies said they would seek a meeting to elect a new Allergan board, and were preparing a tender offer they could take directly to Allergan’s shareholders, increasing the pressure on Allergan’s management.

However, it may take months to call a meeting and arrange for a vote. In the call, hedge fund manager William Ackman said the earliest a meeting would be called is Aug. 7. Allergan, however, can delay a meeting, meaning it could come as late as November.

The latest turn of events comes after Valeant and Mr. Ackman twice raised their offer for Allergan.

Allergan has issued the following statement in response:

“Allergan urges all of its stockholders to refrain from taking any action, including returning any proxy card sent by co-bidders Pershing Square and Valeant, until they have reviewed the recommendation of Allergan’s Board of Directors. Under federal securities laws, Pershing Square and Valeant cannot solicit proxies from Allergan stockholders until Pershing Square and Valeant provide stockholders with definitive proxy solicitation materials.”

Valeant, backed by Pershing Square, made the $53 billion joint bid for Allergan in April as part of Valeant's strategy to become one of the five-biggest drug companies by market capitalization by the end of 2016.