(Adds details on letter, background)
By Svea Herbst-Bayliss
BOSTON Aug 13 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)