Pershing Square Capital has formally proposed six new directors for Allergan’s board as tries to bring Valeant’s $53bn takeover attempt to fruition.
The hedge fund owned by billionaire William Ackman has been trying to force a special meeting of Allergan’s shareholders to try to force the removal of the bulk of the company’s nine board members and replace them with people who support Valeant’s hostile bid.
The six would-be directors have been named as Betsy Atkins, Cathleen Black, Fredric Eshelman, Steven Shulman, David Wilson and John Zillmer and – according to Ackman – each of them is “an independent, skilled leader with relevant domain, industry and/or executive management experience.”
Specialty pharmaceutical company Allergan – best known as the manufacturer of cosmetic medicine Botox (onabotulinumtoxinA) – has rebuffed Valeant’s advances and repeatedly argued that the acquisitive Canadian company is an empire built on sand.
Allergan’s board reacted to Pershing’s announcement in familiar fashion, saying it is “a further attempt by co-bidders Pershing Square and Valeant to acquire Allergan at a grossly inadequate price that substantially undervalues the company and creates significant risks and uncertainties for Allergan stockholders”.
Pershing owns a 9.7 per cent stake in Allergan and has been working feverishly to mobilise shareholders in the company to back Valeant, saying it can convene a meeting if it gains the support of investors who collectively own at least 25 per cent of Allergan’s stock.
The hedge fund has managed to avert a poison pill defence instigated by Allergan, which offers stock to existing shareholders at a steep discount if certain conditions are met such as one group gaining a 10 per cent stake in the firm.
Ackman sued Allergan to seek a judgment that convening a special shareholder meeting would not be a trigger for the poison pill, and the two parties reached an agreement to that effect last month. Allergan has been running its own campaign, emphasising the value of its pipeline and its bright prospects as an independent company.
None of the nominees own significant amounts of Allergan stock and they come from a variety of professional backgrounds. Allergan stressed in its statement that its own board has “significantly more industry experience” than the Pershing slate.