Lawyers Have Documents That Prove Allergan Inc. Misled Investors About Valeant: Ackman

Lawyers Have Documents That Prove Allergan Misled Investors About Valeant: Ackman

October 17, 2014

By Riley McDermid, BioSpace.com Breaking News Staff

Activist investor Bill Ackman is back in the ring with Allergan Inc. , after accusing the Botox maker’s board of misleading investors in its attempt to thwart a hostile takeover bid from Valeant Pharmaceuticals .

The generic drugmaker has spent all summer battling with activist hedge fund investor Ackman, a major shareholder in the company, who has been heavily involved in the effort to force Allergan to accept a $53 billion bid for the company from Valeant.

Ackman made the allegations Thursday during a conference in Toronto, where he told reporters his lawyers had uncovered various manipulations, including potential stock tampering.

"We've actually found evidence that will come out in the next few days of attempts at manipulating Valeant's stock price down," Ackman said. Ackman said he had not personally seen the documents but had been informed of their existence by his lawyers.

Ackman's $15 billion hedge fund Pershing Square Capital Management is a top shareholder in Valeant, which has been attempting a hostile takeover of Allergan since April. Valeant quickly upped its offer over a series of weeks and eventually launched a tender offer.

“We believe they put those statements out [and] that they knew they were false at the time that they made them,” he continued.

“This was a conscious takeover defense strategy to malign Valeant and the company and their accounting and the stock price and, in fact, they didn’t believe what they were saying when they made those statements," he said.

Allergan declined to comment.

Both companies have been using the legal system to force their points. In August, Allergan sued the two companies, alleging their cozy relationship has run afoul of insider trading regulations. Ackman owns 9.7 percent of Allergan, an amount the company has asked a court to disqualify as counting towards a 25 percent shareholder quorum.

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