NEW YORK, N.Y. - Pershing Square Capital Management has formally asked Allergan shareholders to support its bid for a special meeting to remove six directors and allow Valeant to proceed with its hostile takeover bid.
The activist investment firm controls a 9.7 per cent stake in Allergan and has said in the past it hoped to call a meeting after teaming up with Valeant Pharmaceuticals (TSX:VRX) in its takeover attempt.
Pershing has now filed documents with the U.S. Securities and Exchange Commission asking shareholders to back the meeting. Investors holding at least 25 per cent of Allergan's shares need to support the call for a special meeting for one to be held.
In the filing, Pershing argues that shareholders see substantial value in Valeant’s revised proposal, but says Allergan's board has refused to engage with Valeant "in any way" when it comes to the merger and has made it difficult to gather the required support through company bylaws that it claims are too onerous.
Valeant says it "fully supports" Pershing Square's efforts to call the meeting because it would give shareholders the right forum to express their views on the offer.
Allergan has repeatedly refused to meet with Valeant to discuss its more than US$50-billion stock-and-cash bid, arguing the US$72 in cash and 0.83 of a Valeant share for each Allergan share undervalues the company and creates significant risks and uncertainties for its shareholders.
In a statement Monday, Allergan called the meting request "a further attempt by co-bidders Pershing Square and Valeant to acquire Allergan at a grossly inadequate price that substantially undervalues the company."
"Today’s announcement also fails to address the serious concerns raised by Allergan and important members of the investment community about Valeant’s anemic organic growth driven by unsustainable price increases, among other fundamental business model issues,” the company said.