Bill Ackman’s Pershing Square Settles Litigation With Allergan Inc. (AGN)

Pershing Square, managed by Bill Ackman, revealed in a new filing with the U.S. Securities and Exchange Commission that it has settled a lawsuit with Allergan Inc. (NYSE:AGN). Pershing Square owns 28.88 million shares of Allergan Inc. (NYSE:AGN), the stake is equal to 9.7% of common stock.

Bill Ackman in crowd

In the filing, Pershing Square disclosed that it entered into a settlement with Allergan Inc. (NYSE:AGN) resolving to the fund’s satisfaction the previously announced “poison pill” litigation in the Delaware Court of Chancery. The settlement provides the clarification sought by Pershing Square that its actions in connection with the solicitation and receipt of revocable proxies to call a special meeting of shareholders of Allergan Inc. (NYSE:AGN) will not trigger the company’s recently adopted poison pill.

Pershing Square states that the settlement paves the way for it to soon begin actively soliciting proxies to call the special meeting.

“We are pleased that further court action is not necessary to enable us to proceed with calling a special meeting of Allergan shareholders,” stated Mr. Ackman. “This resolution provides the clarification we were seeking to allow Allergan shareholders to proceed with the process of calling a special meeting without fear of tripping the pill.”

Allergan Inc. (NYSE:AGN) is a multi-specialty health care company having a portfolio of pharmaceuticals, biologics, medical devices and over-the-counter consumer products, and state-of-the-art resources in R&D, manufacturing and safety surveillance. The company has a market cap of $50.3 billion. Aside from Pershing Square, Samuel Isaly’s Orbimed Advisors holds 2.27 million shares of the company, and Jonathon Jacobson’s Highfields Capital Management owns 1.52 million shares.

On Monday, Allergan Inc. (NYSE:AGN) said that its board of directors unanimously rejected an unsolicited exchange offer by Valeant Pharmaceuticals Intl Inc (NYSE:VRX) to acquire all outstanding common shares of Allergan Inc. (NYSE:AGN). The company’s board recommends stockholders not tender any Allergan shares to Valeant because the offer is grossly inadequate, substantially undervalues the company, creates significant risks and uncertainties for Allergan stockholders, and is not in the best interests of the company and its stockholders, the company said in a statement.

Earlier in February, Pershing Square signed an agreement with Valeant Pharmaceuticals International Inc (NYSE:VRX), under the terms of which the parties agreed to consult with each other regarding their investments in Allergan. The parties agreed to form a joint entity, which will acquire Allergan. Valeant Pharmaceuticals has proposed a merger in which the shareholders of Allergan would receive common shares of Valeant and cash.

In a press release, Valeant Pharmaceuticals International Inc (NYSE:VRX) stated that it proposed an offer in which Allergan Inc. (NYSE:AGN)’s shareholders should receive $48.30 in cash and 0.83 shares of Valeant for each Allergan share.

Disclosure: none

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