September 12, 2014 / 2:39 AM / 3 years ago

CORRECTED-UPDATE 4-Allergan investors owning 35 pct to demand special meeting

(Corrects first paragraph to show that investors owning more than 35 pct of shares, not more than 35 percent of investors, called for meeting)

By Soyoung Kim, Olivia Oran and Svea Herbst-Bayliss

NEW YORK, Sept 11 (Reuters) - Investors owning more than 35 percent of Allergan shares have asked the company to call a special meeting, handing a victory to billionaire investor William Ackman who is trying to broker a sale of the Botox maker to Valeant Pharmaceuticals.

Ackman's $15 billion hedge fund Pershing Square Capital Management on Thursday delivered requests from shareholders owning 1.5 percent of the stock to the company, the company said in a statement.

Reuters reported earlier that Pershing Square, Allergan's largest shareholder with a 9.7 percent stake, had secured enough additional support from shareholders to pass the critical 35 percent mark and that the requests would be delivered to Allergan's headquarters in Irvine, California on Thursday.

"Allergan will review these requests in addition to the requests from stockholders owning 2.8 percent of Allergan's shares that were delivered on September 3, 2014," the company said in a statement.

The first batch of requests totaling 31 percent of the shareholders were handed over on August 22 and Allergan last month set December 18 as the special meeting date.

Pershing Square has been working with Canada's Valeant to pursue a hostile takeover bid for Allergan, but the Botox maker has refused and has instead tried to line up another partner.

To force the company to the table, Ackman has been pushing for a special meeting where he hopes to replace most company directors with his own nominees who he expects will be more receptive to Valeant's bid..

Allergan on Thursday brushed aside the development and said while Valeant and Pershing Square are trying to "change the subject," it is trying to deliver a compounded annual growth rate of more than 20 percent EPS growth.

Crossing the 35 percent mark however signals an important step because Allergan is suing to prevent Pershing Square from voting its nearly 10 percent stake, alleging that the firm improperly built the holding as Ackman was hammering out a takeover bid with Valeant.

Even in the unlikely event Ackman's votes are not counted, having 35 percent of investor consent would satisfy Allergan's by-laws that at least one quarter of its shareholders request a special meeting.

"The delivery of additional requests for the Special Meeting by Pershing Square is not a meaningful development" because the meeting date is already set, Allergan said in the statement.

Pershing Square could not be reached for comment and Valeant was also not immediately available to comment.

Valeant and Pershing Square offered to buy Allergan on April 22 but Allergan has said the offer undervalues the company. Since then Allergan announced cost cuts and said it was looking for acquisitions as it seeks to persuade shareholders they are better off if it stands alone.

Ackman wants to move the meeting date to mid-November, saying that Allergan is trying to give itself time to find an alternative deal.

Allergan Chief Executive David Pyott has said that he is looking at the potential of making a big acquisition, making the company a subject of frenzied merger speculation in recent weeks involving several companies including Salix Pharmaceuticals Ltd and Jazz Pharmaceuticals Plc.

But Allergan has also said that it would give shareholders a fair chance to weigh Valeant and Pershing's takeover proposal.

Since Valeant announced its plans, Allergan's share price has climbed, creating $1 billion in paper gains for Pershing Square, one of this year's best performing hedge funds.

Reporting by Soyoung Kim and Olivia Oran in New York, and Svea Herbst-Bayliss in Boston; Editing by Chizu Nomiyama, Meredith Mazzilli, Bernard Orr and Stephen Coates

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