Exclusive: Paulson & Co amasses large stake in Allergan: sources

Wed Jun 25, 2014 9:02pm EDT
 
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By Nadia Damouni and Olivia Oran

New York (Reuters) - Hedge fund Paulson & Co has amassed a large stake in Allergan Inc (AGN.N: Quote) of more than 6 million shares and supports a deal between the Botox maker and Valeant Pharmaceuticals Inc (VRX.TO: Quote), people familiar with the matter said on Wednesday.

The position is expected to make the prominent U.S. hedge fund, led by John Paulson, one of the top 10 to 15 holders of Allergan, according to Thomson Reuters shareholder data as of March 31.

Paulson's new position in Allergan could give Valeant a boost, as the company tries to drum up support from at least 25 percent of Allergan shareholders so that it can call a special meeting.

Valeant and its ally, Bill Ackman's Pershing Square Capital Management, are seeking to call a meeting to elect new directors to Allergan's board, which could pave the way for a takeover of the company.

Allergan shares closed up 2.3 percent on Wednesday at $169.07, while Valeant shares closed up 4.5 percent at $125.94, both on the New York Stock Exchange.

Valeant has taken its offer directly to Allergan shareholders after Allergan rejected its latest $53 billion takeover bid, comprised of $72 in cash and 0.83 share of Valeant stock per Allergan share.

Valeant last week began an exchange offer for the Irvine, California-based company. Allergan advised investors on Monday not to accept Valeant's offer, which it characterized as "grossly inadequate." Valeant, Allergan and Paulson declined to comment.

Other large Allergan shareholders - including T.Rowe Price, ranked as the ninth largest holder as of March 31 - are pushing for a deal with Valeant, people familiar with the matter said.   Continued...

 
J. Michael Pearson, Chairman of the board and Chief Executive Officer of Valeant Pharmaceuticals International Inc., waits for the start of their annual general meeting in Laval, Quebec May 20, 2014. REUTERS/Christinne Muschi