(Adds details from Ackman letter)
May 5 Activist investor William Ackman, Allergan
Inc's largest shareholder, has cautioned the company
against pursuing any alternative deal that did not offer a
better value than Valeant Pharmaceuticals International Inc's
$47 billion bid.
Valeant teamed up with Ackman last month to make an
unsolicited offer for Allergan.
Allergan was preparing to approach Shire Plc about a
potential takeover, even though the Irish drugmaker rebuffed a
previous overture, Reuters reported last week.
"Even if Allergan were able to identify a transaction that
offers a higher cash value than the estimated value of the
Valeant proposal at the time of transaction closure, we do not
believe such a cash transaction would be necessarily superior to
Valeant's stock and cash offer," Ackman said Monday in a letter
to Michael Gallagher, lead director of Allergan.
Shareholders might prefer to own stock in the combined
enterprise, said Ackman, one of the hedge fund industry's most
widely watched investors. Ackman's Pershing Square Capital
Management has accumulated 9.7 percent of Allergan's common
Ackman in the letter said it was his understanding that
Allergan has approached alternative potential combination
partners but has not contacted Valeant.
He urged the Botox maker to begin discussions with Valeant
soon. The list of global pharmaceutical companies with the
financial capacity to buy Allergan is limited, he warned.
"Today, Allergan is in a good position to negotiate with
Valeant. This many not always be the case," Ackman said.
(Reporting by Susan Kelly in Chicago; Editing by Cynthia