UPDATE 1-U.S. court sets up Ackman, Valeant to vote at Allergan meeting

Tue Nov 4, 2014 2:20pm EST
 
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(Adds details of ruling, Allergan and Valeant statements)

Nov 4 (Reuters) - A federal judge on Tuesday cleared the way for Pershing Square Capital Management and Valeant Pharmaceuticals International Inc to vote at an Allergan Inc shareholder meeting where they are seeking to remove six of nine Allergan board members as part of a hostile takeover attempt.

The decision was part of an insider trading suit filed by Botox maker Allergan to block activist investor William Ackman from voting his nearly 10 percent stake in the company at the meeting scheduled for Dec. 18.

Ackman, who runs Pershing Square, and Valeant have gathered investors representing an additional 25 percent of Allergan shares in order to call the special meeting. They want to use the proxy battle as a platform to force Allergan to open talks about a deal.

The companies offered in April to buy Allergan in a cash-and-stock bid now worth almost $55 billion, but Allergan has staunchly refused the offer, saying it is not good for shareholders.

The federal court ruling stopped Valeant and Pershing Square from voting at the meeting until they make new disclosures in their proxy about the insider trading case. No trial date has been set in that case.

Valeant and Pershing Square said in separate statements they would make the required additional disclosures promptly.

The disclosures must include the fact that Allergan filed a lawsuit arguing that Ackman's acquisition of Allergan shares while it knew of Valeant's offer plans violated a securities rule.

Pershing and Valeant must also disclose that the court found the case had raised "serious" questions about whether the companies violated the securities rule, wrote U.S. Judge David Carter in the Central District of California, Southern Division.

Allergan said in a statement it would appeal to a higher court and ask for an emergency ruling to bar Pershing Square from voting. (Reporting by Caroline Humer; Editing by Meredith Mazzilli and Jeffrey Benkoe)