UPDATE 1-Ackman's fund sells 5 mln Valeant shares to generate tax loss

Thu Dec 31, 2015 5:27pm EST
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(Adds details on investment, background on fund)

By Svea Herbst-Bayliss

BOSTON Dec 31 (Reuters) - Billionaire investor William Ackman said on Thursday he sold about 5 million shares in drug company Valeant International in order to generate a tax loss as investors in his Pershing Square Capital Management face the biggest loss in the company's history.

Ackman's hedge fund now owns 29.1 million shares in Valeant, or 8.5 percent of the company, down from 34.1 million shares, or 9.9 percent, according to a regulatory filing made after the market closed on Thursday, the last trading day of 2015.

Pershing Square sold shares in its two on-shore portfolios in order to generate a tax loss for investors while the two off-shore portfolios did not sell any shares, the filing said.

News that Ackman, one of Valeant's biggest and most vocal backers, sold some of his shares comes at the tail end of a tumultuous year for the Canadian pharmaceutical company, whose share price had surged and then plummeted amid questions about its drug pricing and accounting practices.

The company, after disclosing last week that its chief executive officer, Michael Pearson, had been hospitalized with severe pneumonia, this week named a trio of company executives to take over until Pearson returns.

Ackman was not available to comment, and a company spokesman declined to say anything beyond the filing.

For Ackman, 2015 is sure to be one of his worst years ever, in part because of the heavy losses in Valeant. One of Ackman's funds posted a 19.7 percent loss through Dec. 29. Final calculations for all of the firm's funds have not been made.   Continued...