Aug 6 Institutional Shareholder Services (ISS)
is backing activist investor Bill Ackman's call for a special
meeting of Allergan Inc investors that could topple the
Botox-maker's board and increase the chances of a takeover by
Valeant Pharmaceuticals International.
ISS' recommendation on Wednesday follows a similar view from
shareholder advisory firm Glass Lewis on Monday, giving Ackman's
Pershing Square Capital Management momentum as the hedge fund
tries to muster support for the meeting. ISS is the largest
proxy adviser for institutional investors.
Pershing, Allergan's biggest investor with a 9.7 percent
stake, needs to garner shareholder support representing 25
percent of the California company, best known for its Botox
anti-wrinkle injections. Pershing wants to replace most of
Allergan's board, which has refused to negotiate with Laval,
In a report, ISS said "there appear to be significant
governance issues which could be addressed" in a special
Allergan said the advisory firms were merely stating that
shareholders should have the right to call a special meeting.
"These recommendations do not change the fact that Valeant`s
offer is grossly inadequate, substantially undervalues Allergan,
creates significant risks and uncertainties for Allergan
stockholders and is not in the best interests of the company and
its stockholders," Allergan said in a statement.
Allergan has been fighting the takeover bid since it was
announced on April 22.
Valeant's cash and stock offer is currently worth about $49
billion, after its shares fell 12 percent since reporting
disappointing second-quarter earnings on July 31.
Pershing Square and Valeant officials could not be
immediately reached for comment.
Allergan shares lost 1.2 percent in afternoon trading in New
York to $156.56, while Valeant's U.S.-listed stock dipped 0.4
percent to $110.20.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Tom