CORRECTED-Valeant slashes stake in Allergan after losing bid

Fri Nov 21, 2014 10:44am EST
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(Corrects reference to previous stake)

Nov 20 (Reuters) - Valeant Pharmaceuticals International Inc said it cut its stake in Allergan Inc to 0.1 percent, three days after Actavis Plc trumped its offer for the Botox maker.

Pershing Square Capital Management informed Valeant that PS Fund 1 sold all of its 2.2 million shares in Allergan allocated to Valeant USA, Valeant said in a regulatory filing.

PS Fund 1 is a shell fund that was set up by Valeant and Pershing Square to act as a joint acquisition vehicle. Combined, the two parties had held a 9.7 percent stake in Allergan.

Pershing Square, run by billionaire William Ackman, had been working with Valeant for a deal for the Canadian drugmaker to buy Allergan.

Dublin-based Actavis offered $219 per share in cash and stock, amounting to billions more than Canada's Valeant was prepared to pay. (Reporting By Subrat Patnaik and Narottam Medhora in Bangalore; Editing by Ken Wills)