Allergan Inc. To Slash 129 California Jobs Amid Hostile Takeover Battle
September 15, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Allergan Inc. , which has been fighting off hostile takeover attempts by Valeant Pharmaceuticals and Pershing Square Capital Management, filed a Worker Adjustment and Retraining Notification (WARN) with the California Employment Development Department to cut 129 jobs.
The report indicated the company will cut 129 workers by October 31, 2014.
In mid-August, BioSpace reported that the Security and Exchange Commission (SEC) was investigating the Valeant and Pershing Square bids. Allergan, headquartered in Irvine, California, and best known for cosmetologic drug Botox, had filed a lawsuit accusing the two companies of insider trading.
Activist investor Bill Ackman is the head of the New York hedge fund, Pershing Square Capital Management.
The lawsuit stated, “Because of the crippling debt required to finance its many previous acquisitions, Valeant was unable to borrow enough money to acquire Allergan, and therefore needed an ally with capital to contribute — and found one in Ackman. Ackman, in turn, found in Valeant an incredible opportunity to buy Allergan stock with advance inside knowledge of a tender offer that was certain to cause the stock price to increase — guaranteeing him a massive return in record time.”
In a related story, Allergan was looking to acquire Salix Pharmaceuticals , to help ward off the hostile takeover attempt. Allergan was also looking at San Francisco-based Acterlion Ltd. (Allschwil/Basel, Switzerland).
Allergan continues to fend off the hostile takeover bid but has come up against increasing resistance from stakeholders.
Pershing Square asked for additional requests from stockholders owning 1.5 percent of Allergan’s shares to a Special meeting of Stockholders. A previous request was delivered on September 3, 2014 for stockholders owning 2.8 percent of Allergan’s shares.
Allergan said in a statement that said, “Allergan’s current strategic plan (2014 through 2019) is expected to deliver a compounded annual growth rate of greater than 20 percent EPS growth, including estimated 2016 EPS at approximately $10."
“Allergan has already scheduled the Special Meeting for December 18, 2014. As such, the delivery of additional requests for the Special Meeting by Pershing Square is not a meaningful development," the company noted. "The lawsuit in California is seeking an order barring Valeant, Pershing Square, Mr. Ackman, and entities affiliated with them from voting shares that Allergan believes were acquired in violation of the federal securities laws, including insider trading.”
Although Allergan’s premier product is Botox, the company has a well-rounded portfolio of products in eye care, neurosciences, dermatology and urologics.
Valeant Pharmaceuticals is located in Laval, Quebec and has a range of product areas, including dermatology, eye health, aesthetics, consumer products, neurology and oral health. Since 2008, Valeant has acquired more than 100 smaller companies.