Valeant Pharmaceuticals Intl Inc (VRX), Pershing Square Took no Steps Towards Tender Offer before Buying Allergan, Inc. (AGN) Stock: Bill Ackman

Speaking to CNBC’s Scott Wapner over the phone yesterday, investor and hedge fund manager Bill Ackman denied the allegations set forth against him and Valeant Pharmaceuticals Intl Inc (TSE:VRX) by Allergan, Inc. (NYSE:AGNclaiming they were in cahoots on a takeover deal of Allergan, Inc. (NYSE:AGN). Ackman’s Pershing Square hedge fund is the largest investor in Allergan, Inc. (NYSE:AGN).

Bill Ackman in crowd

In Wapner’s report on CNBC, he described Ackman as having told him that “neither Pershing Square nor Valeant took any steps whatsoever towards a tender offer before buying that [Allergan] stock. It was only after Allergan rejected our three offers some two months later that we decided to launch an exchange offer.”

Wapner added that Ackman’s comments have confirmed the statement already released by Pershing Square, which stated among other things that, “there is nothing illegal, unethical or improper in taking a toehold position before a merger is proposed, even if it is not wanted by the target’s management.”

Valeant also released a statement denying Allergan, Inc. (NYSE:AGN)’s claims, and saying, “we are confident that the trading was completely lawful, as our reply to Allergan’s frivolous lawsuit will make clear.” Allergan, Inc. (NYSE:AGN) filed a federal lawsuit against both parties, accusing them of insider trading.

The SEC is currently in the early stages of an investigation into the circumstances surrounding the transactions and any understanding Valeant and Ackman had with each other, with Wapner quoting sources who were in contact with Dow Jones as saying that the investigation may not lead to any enforcement action taken against either party.

If nothing else, the result from the investigation may be that if the rules weren’t technically broken and nothing explicitly illegal took place, but are still deemed unethical, that the rules will need to be changed by the SEC.

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