September 12, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Botox maker Allergan and Valeant Pharmaceuticals are once again back in the boxing ring, after the company announced that 35 percent of Allergan’s shareholders have asked for a special meeting with management slated for Dec. 18.
Activist hedge fund investor Bill Ackman has been heavily involved in the effort to force Allergan to accept a $53 billion bid for the company from Valeant.
The shareholders involved only own around 2.8 percent of Allergan but they meet the threshold under U.S. securities law, which requires 25 percent of a company’s investors are needed to call a special meeting for shareholders
Ackman’s $15 billion hedge fund Pershing Square Capital Management is a top shareholder in Valeant, which has been attempting a hostile takeover of Allergan since April. Valeant quickly upped its offer over a series of weeks and eventually launched a tender offer.
Both companies have been using the legal system to force their points. In August, Allergan sued the two companies, alleging their cozy relationship has run afoul of insider trading regulations.
Ackman owns 9.7 percent of Allergan, an amount the company has asked a court to disqualify as counting towards a 25 percent shareholder quorum. The company has enlisted Goldman, Sachs & Co. and BofA Merrill Lynch as financial advisors and Latham & Watkins, Richards, Layton & Finger, P.A. andWachtell, Lipton, Rosen & Katz as legal counsel.
Still, the company may not even make it to the Dec. 18 special meeting, if a federal judge in Delaware decides the meeting can take place in November.
Valeant and Ackman have rejected Allergan’s standing to request an injunction against the two companies involvement in a special meeting, arguing that because it does not own any of its own stock, it has no legal way to do so.
“Not only?is this injunctive relief they’re seeking never been granted by any court, there’s no court that’s ever found that they actually have standing to bring an insider trading case where they don’t own the stock,” Pershing Square lawyer Mark Holscher of Kirkland and Ellis said.
