(Adds details on letter, background)
By Svea Herbst-Bayliss
BOSTON Aug 13 (Reuters) - Billionaire investor William Ackman is digging in on getting a hostile takeover bid for Botox maker Allergan Inc. done.
As the company's biggest investor, the hedge fund manager told clients on Wednesday that his firm, Pershing Square Capital Management, "will continue to focus on getting a transaction completed and maximizing the value of our investment."
In his most extensive comments in weeks on Valeant Pharmaceuticals' $48.7 billion hostile bid for Allergan, Ackman suggested he and other Allergan shareholders will be successful in forcing the company to call a special meeting. He hopes to replace the bulk of directors with new board members who will be willing to accept Valeant's bid, first made April 22.
Last week two prominent proxy advisory firms suggested that Allergan shareholders side with Ackman in calling for a special meeting. "Their support is a good leading indicator of the probability of success of our efforts," Ackman wrote.
One quarter of Allergan's shareholders must call for the meeting and while Pershing Square has been mum on how many others have signed up, people familiar with other shareholders' thinking suggest more than 25 percent are siding with Ackman.
"Based on their scorched-earth attempts to stop or delay the meeting, Allergan's management and board appear to already know that their shareholders do not support them," Ackman wrote to clients, including state pension funds and wealthy individuals.
His comments follow two days after activist hedge fund manager Jeffrey Ubben, a top Valeant shareholder, told Reuters that a drawn out bidding war for Allergan might be too distracting and the company does not have to buy the Botox maker. That sparked speculation that some Valeant shareholders appear to be urging the company to walk away.
Ackman's committed tone in his letter suggests that he is nowhere near ready to give up on a proposed deal that has already earned his investors a big return after Allergan's share price jumped in the wake of the announced bid. His largest portfolio has gained 25 percent in 2014, ranking Pershing Square as one of this year's best performing hedge fund firms.
Ackman also addressed insider trading charges that Allergan has leveled at him and Valeant in an August 1 lawsuit, assuring investors "we have been meticulously careful in how we have constructed and implemented this investment and transaction."
Noting that investors sometimes ask for their money back especially when funds are performing very well, Ackman said the firm is pushing ahead with its quest to access more permanent capital by seeking to list its Pershing Square Holdings Ltd fund on an exchange later this year.
The firm, which has been making headlines with many of its investments including Herbalife, has also hired its first ever Director of Corporate Communications, Ackman said. John Pinette, who worked most recently for Bill and Melinda Gates in the Gates Family Office will start his position next week.
(with additional reporting by Caroline Humer and Nadia Damouni in New York; Editing by Chizu Nomiyama and Andrew Hay)