Allergan reaches truce with suitors on special shareholder meeting
(Reuters) - Allergan Inc (AGN.N: Quote) has agreed not to throw up any roadblocks to a special shareholder meeting on Dec. 18, giving Pershing Square Capital Management a chance to attempt its threatened replacement of Allergan board members.
The battling parties late on Monday settled their pending litigation before the Delaware Court of Chancery and agreed to a special shareholder meeting on the originally scheduled date.
Billionaire William Ackman's Pershing Square and Canada's Valeant Pharmaceuticals Intl (VRX.TO: Quote), which are attempting a $52 billion takeover of Allergan, sued the maker of Botox anti-wrinkle treatment last month, alleging that Allergan was trying to avoid a special meeting to give it time to find an alternative deal.
Although Allergan subsequently set the meeting for Dec. 18, Ackman and Valeant had been concerned that Allergan's strict corporate rules might be invoked in the meantime to stall the meeting.
Allergan will not try to invalidate any special meeting requests or postpone or cancel the meeting, Pershing Square said early Tuesday.
The settlement, by easing Allergan's corporate rules, means the meeting is now certain. Even so, Stifel, Nicolaus analyst Annabel Samimy said the dynamics of the ongoing takeover battle have not appreciably changed.
"Allergan was always going to allow the meeting, and they scheduled it," Samimy said. Allergan's overriding challenge now is to convince its shareholders in coming months that it offers greater value to them as a stand-alone company, she said.
Allergan's biggest potential weapon, she said, would be to make a sizable acquisition that would boost its earnings potential and make the company less affordable to Ackman and Valeant. "The heat is on for them do a deal."
Pershing Square, Allergan's largest shareholder with a 9.72 percent stake, and Valeant made a hostile offer for Allergan in April. Since then, Allergan has been fighting for investor support for its own stand-alone plan that includes cost cuts and making an acquisition of its own. Continued...