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Bill Ackman Sends One More Letter to Allergan, Inc. (AGN) Pushing For Company’s Sale To Valeant Pharmaceuticals Intl Inc (VRX)

Bill Ackman does not show any signs of giving up on the proposed takeover of Allergan, Inc. (NYSE:AGN) by Valeant Pharmaceuticals Intl Inc (NYSE:VRX). According to a recent filing with the Securities and Exchange Commission, Ackman has sent another letter to the management of Allergan, Inc. (NYSE:AGN) asking to reconsider their stance and act for the benefit of the company’s shareholders. Ackman and his fund, Pershing Square, hold 28.8 million shares, which account for approximately 9.7% of the company’s common stock.


In his letter, Ackman points to the shareholders’ increasingly negative sentiment with regard to the way the company management and its Board of directors have handled the takeover attempt by Valeant Pharmaceuticals Intl Inc (NYSE:VRX).  The fact that several big shareholders of Allergan, Inc. (NYSE:AGN) have sold most or all of their shares since the first bid in April is another sign that shareholders believe the management is going in the wrong direction.

“It has been nearly five months since Valeant proposed to merge with Allergan. During this period, Allergan has distinguished itself in running the most shareholder-unfriendly, hostile defense process perhaps in the history of corporate America. In doing so, Allergan has wasted corporate resources, poisoned its relationship with its shareholders, and destroyed shareholder value.

Just this past week, we delivered consents from a third of Allergan shareholders to call a special meeting. This one-third participation vastly understates shareholder sentiment on this issue. I note that six of the top 10 shareholders participated in the consent process, which is remarkable in light of the extraordinarily burdensome, inappropriate, and unprecedented requirements to call a meeting, particularly for these large institutions for which your bylaws create even more cumbersome disclosure requirements,” the letter said.

The full letter can be found here:

Ackman letter to Allergan 09.09.14

A host of hedge fund managers have rushed to open position in Allergan, Inc. (NYSE:AGN) during the second quarter in the hope of a successful merger with Valeant Pharmaceuticals Intl Inc (NYSE:VRX). John Paulson is one who decided to bet on this deal, building a significant stake in the company. His fund, Paulson & Co, has reported ownership of 5.6 million shares valued at $948 million in its latest 13F filing. Matthew Halbower, the manager of Pentwater Capital Management, has acquired 3.91 million shares valued at $662 million, a position that accounts for 7% of the fund’s equity portfolio. Kenneth Mario Garschina has also built a notable position for his fund, Mason Capital Management, amassing 2.74 million shares worth more than $464 million.

Disclosure: none.