Ackman's Pershing Square sells Valeant stake, takes $3 billion loss

Tue Mar 14, 2017 6:32pm EDT
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By Svea Herbst-Bayliss

BOSTON (Reuters) - Billionaire investor William Ackman walked away from Valeant Pharmaceuticals International Inc on Monday with a loss of more than $3 billion as he sold his entire stake in the struggling drug company after trying to rescue it for some 18 months.

The abrupt and unexpected move by the powerful activist investor sent Valeant shares tumbling almost 10 percent in after-hours trading. They have lost 95 percent of their value since mid-2015.

For Ackman, it marked a dramatic climbdown from his vocal support of the company, but should help soothe his own investors who had begun to show signs of concern about mounting losses in his portfolio.

"We elected to sell our investment and realize a large tax loss which will enable us to dedicate more time to our other portfolio companies and new investment opportunities," Ackman said in a statement.

Ackman's Pershing Square Capital Management became one of Valeant's biggest investors in 2015 when it sunk some $3.2 billion into the company. At its peak the Valeant stake was worth roughly $4 billion.

Pershing Square said on Monday the Valeant position, at its current market value, represented 1.5 percent to 3 percent of its various funds.

Already one of the hedge fund industry's most vocal investors, Ackman turned himself into Valeant's biggest cheerleader and fixer, even as the stock price plunged amid U.S. regulators' probe of Valeant's pricing policies and problems at its specialty pharmacy unit, Philidor.

After securing a board seat, Ackman replaced the chief executive, overhauled the board of directors and made some asset sales.   Continued...

FILE PHOTO - William Ackman (L), chief executive of Pershing Square Capital, speaks with David Weinreb, CEO of Howard Hughes Corp. on the floor of the New York Stock Exchangein New York, U.S. on November 10, 2015. REUTERS/Brendan McDermid/File Photo