(Reuters) - Activist investor Appaloosa LP said on Monday that Allergan Plc’s board was doing “everything except what needs to be done” in a series of concessions the drug company announced last week in response to criticism from the hedge fund.
Allergan agreed to split its chairman and chief executive roles, but only at its next leadership change. A source close to Allergan told Reuters on Friday that current Chairman and CEO Brent Saunders, 49, has no plans to step down.
Appaloosa, led by billionaire David Tepper, has been pressing Allergan since last year to separate the roles of CEO and chairman. It has also suggested the Botox maker consider a sale or breakup of the company.
“Unless the board intends to make a CEO transition in the very near-term, these measures are no more than a meaningless series of gestures intended to preserve the current system of lax oversight and further entrench management,” Appaloosa said in a statement.
“The status quo is unacceptable and disruptive measures are necessary for shareholders to convince this board that it must make the decisions required to fix the company or, if they are unwilling, sell it to a more capable acquirer or merger partner.”
But Allergan said in a statement that it does not believe Appaloosa’s interests are aligned with those of the company’s long-term shareholders.
“We believe Appaloosa, who owns less than one percent stake, is attempting to undermine our CEO and pushing for a firesale of the company for a short-term bump in stock price,” the company said.
Shares of Allergan closed down 2 percent at $146.34 on Monday.
Reporting by Saumya Sibi Joseph in Bengaluru and Michael Erman in New York; Editing by Dan Grebler