COLUMN-New details in Allergan anti-takeover campaign: Frankel

Fri Oct 24, 2014 5:44pm EDT
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(The opinions expressed here are those of Alison Frankel, a columnist for Reuters.)

By Alison Frankel

NEW YORK (Reuters) - Earlier this week, I told you about new filings by the Canadian pharmaceutical company Valeant and the hedge fund Pershing Capital that suggested their target Allergan had disregarded advice from its financial adviser Goldman Sachs.

The Pershing and Valeant briefs were heavily redacted and the underlying exhibits were sealed, but the implication from unredacted snippets was that Goldman had suggested Allergan request accounting information from Valeant and Allergan rejected the recommendation. Then, according to Pershing and Valeant, after Goldman refused to go along with attacks on Valeant's business model, Allergan hired additional experts with no such reservations.

Much of the once-sealed evidence in the case is now public. It's must-read stuff for M&A buffs - an unusually robust account of one of the most innovative and celebrated takeover battles I can remember. But I don't see much in the emails or testimony to prove that Allergan refused to follow Goldman's advice to engage with Allergan.

'VALEANT IS VILE' There are definitely some headaches for Allergan in the newly disclosed emails, including one from CEO David Pyott to Allergan corporate development vice president David Lawrence, summarily rejecting Lawrence's suggestion that Allergan tone down a presentation entitled "Valeant Is Vile."

Lawrence subsequently emailed Allergan's CFO, describing how Pyott had "paddled" him for objecting to the presentation and how he'd since been excluded from directors' meetings and consultations with Allergan's financial advisers. (Lawrence also sent a copy of his original email to Pyott to his personal email account, an interesting move.)

There's also some new evidence to back up Pershing chief William Ackman's claim that Allergan deliberately set out to drive down Valeant's share price as part of Allergan's defense against the hostile bid.   Continued...