(Recasts with details from court filing)
June 13 William Ackman's Pershing Square Capital
Management on Friday it filed a lawsuit against Allergan Inc
seeking confirmation that its request to hold a special
meeting of Allergan shareholders would not trigger poison pill
Ackman and Valeant Pharmaceuticals International
are pursuing in a hostile takeover of Allergan.
Ackman, who owns nearly 10 percent of Allergan, has called
for a shareholder meeting to elect new directors to the
company's board. The suit seeks to confirm that Ackman is not
about to trigger Allergan's poison pill takeover defense as it
seeks shareholder support for the meeting.
Allergan, which makes Botox for wrinkles and other uses, has
rejected a $53 billion joint offer from Ackman and Valeant.
Ackman last week filed documents with the Securities and
Exchange Commission that would start a proxy battle.
Allergan and Valeant both declined to comment on the suit.
Allergan adopted a one-year shareholder rights plan, often
called a poison pill, on April 22, the day Valeant and Ackman
made their offer. The company said it needed time to consider
Allergan's pill will be triggered if a person or group
acquires 10 percent or more of its shares. A poison pill aims to
dilute a stock's value by flooding the market with more shares;
this makes it pricier for a shareholder to get a controlling
The lawsuit filed in Delaware Court of Chancery said it
followed a request to Allergan from Pershing Square on June 6
seeking confirmation that Allergan would not use its poison pill
to impede Ackman's request for a special meeting.
Allergan's bylaws require that a group calling a special
meeting collectively represents 25 percent of shares
outstanding. In the suit, Ackman says he is concerned that by
calling the meeting, it will trigger the pill.
A response from Allergan's counsel dated June 11 did not
provide confirmation that it would not, the document said.
Allergan said in the letter to Pershing Square that its
solicitation and receipt of proxies from other Allergan
stockholders for the purpose of requesting a special meeting
would not, in and of itself, trigger the pill.
Allergan declined to answer more specific questions about
the details of Pershing Square's plan for soliciting those
proxies in the absence of all the facts, according to a copy of
the letter included in the lawsuit.
Allergan rejected a sweetened offer from Valeant and the
activist investor on Tuesday.
Valeant shares traded in New York fell 0.3 percent to
$120.40 while Allergan shares rose 0.6 percent to $162.97.
(Reporting by Natalie Grover and Sweta Singh and Caroline Humer
in New York; Editing by Ted Kerr, Bernadette Baum and Dan