Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Bill Ackman’s Pershing Square Capital Management will today comply with one of Allergan, Inc. (NYSE:AGN)’s demands to submit at least 25% of outstanding shareholders support a special meeting that they seek, sources told CNBC‘s David Faber reported. He said that Valeant and Pershing Square will likely submit more than 30% of shareholders in support of their bid to purchase Allergan.
“[...] Valeant will request a special meeting of Allergan shareholder and will have done so by presenting more than 25% required under the company’s bylaws,” stated Faber.
Allergan, Inc. (NYSE:AGN) is fighting off attempts by Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Pershing Square to purchase it. It ran to the court to frustrate such efforts but failed to have it its way and now it appears as though attempts to stop a special meeting of its shareholders are failing. Valeant and Pershing Square have put forward $49 billion offer to acquire the Allergan. However, the board of directors of Allergan is strongly opposed to such moves. Pershing Square holds about 10% equity stake in Allergan.
The special meeting sought by Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Pershing Square would help them make changes to the board of directors of Allergan, Inc. (NYSE:AGN), mostly likely by voting out the directors. The meeting will also allow the opening of talks about a deal.
“What happens from here gets a little bit more complicated. If you recall we mentioned a number of times the hurdles that Allergan has put in front of the ability to call that special meeting, you need to present, for example, two years worth of trading history [...],” said Faber.
He also stated that even if the call for a special meeting goes through as it is likely to, Allergan, Inc. (NYSE:AGN) may still make demands that further put more hurdles in the way of a deal. For example, he said Allergan may use the 120 days period for a deal to be sealed to ask Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Pershing Square for much more, even in terms of paper work.