Pershing Seeks Removal of 6 Allergan Directors -- 2nd Update

By Anna Prior 

William Ackman's Pershing Square Capital Management LP on Monday called for a special meeting of Allergan Inc. shareholders in an effort to unseat six of the Botox maker's board members.

A representative for Allergan didn't immediately respond to requests for comment.

The efforts, disclosed in a regulatory filing, mark the latest move in a takeover attempt by Valeant Pharmaceuticals Inc. and partner Pershing, which is the largest Allergan shareholder with a 9.7% stake in the company. The Canadian pharmaceutical conglomerate has so far been rebuffed by Allergan since it made its first public offer in April.

On Friday, Valeant boosted its takeover bid for the second time in a week, offering about $52.7 billion in cash and stock for Allergan, partly thanks to Mr. Ackman, who agreed to take less for his own Allergan shares. Irvine-Calif.-based Allergan said Friday it would review the latest offer.

"We believe the market has spoken, and that shareholders see substantial value in Valeant's revised proposal," Pershing said in Monday's filing adding, "to date, the board has refused to engage with Valeant in any way regarding a merger with Valeant."

Valeant had previously threatened a fight for board seats or a hostile tender offer. Monday's filing didn't identify which six of Allergan's nine directors Pershing is looking to replace.

In addition to calling for the removal of the board members, Pershing urged Allergan shareholders to request that the company's board "engage in good faith discussions with Valeant."

Pershing needs consent from shareholders of at least 25% of the company's shares in order to hold the special meeting.

Pershing said many of Allergan's largest shareholders expressed to Mr. Ackman their support of a merger between Allergan and Valeant at a conference last week, and added that certain investors had suggested they would be supportive of a deal if Valeant raised its offer to $180 a share. The latest bid values Allergan at $179.25 a share.

Since Valeant's bid for Allergan was first disclosed in April, the companies have been engaged in a public war of words.

Valeant criticized Allergan's management for spending too freely, particularly on research and development. Valeant, which has promised that it would cut the combined company's R&D spending by 69%, spends little on science, instead focusing on buying established drugs and treatments and selling them through its international network.

Allergan, meanwhile, has said Valeant's cost-cutting would threaten future sales growth and R&D, putting the company at risk. Allergan also questioned the stability of Valeant's business model.

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