Shareholder T. Rowe Price urges Allergan to hold off on deals

Fri Sep 26, 2014 4:13pm EDT
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By Rod Nickel

Sept 26 (Reuters) - T. Rowe Price, the second largest shareholder in Allergan Inc, said on Friday that it wants the company to hold off on making major moves before a Dec. 18 special shareholder meeting, and criticized the board's corporate governance.

The Baltimore-based investment firm is the second Allergan shareholder in two days to criticize the maker of Botox anti-wrinkle injections, which is trying to fend off a hostile, $53.7-billion takeover bid from Valeant Pharmaceuticals International Inc.

The special meeting was requested by shareholders led by activist Bill Ackman for a vote on replacing most of California-based Allergan's directors. A revamped board might then hold talks with Valeant about its stock and cash offer, which has been championed by Ackman.

Ackman's hedge fund Pershing Square Capital Management is Allergan's largest shareholder.

T. Rowe Price has for several months watched the Allergan board's corporate governance practices with "growing concern," said spokesman Bill Benintende in a statement.

"The issues to be voted on at the special meeting of shareholders on Dec. 18 are of such importance that they impose a special duty on the board to refrain from approving any significant, irreversible commitments by the company between now and then unless shareholders are offered the opportunity to vote on them," Benintende said. "We believe this should apply even in the event of all-cash acquisitions that do not ordinarily require a shareholder vote."

Allergan recently revived discussions to buy Salix Pharmaceuticals Ltd in order to fend off Valeant.

Allergan officials were not immediately available for comment.   Continued...