Aesthetics devices maker Allergan (NYSE:AGN) is trying a new tactic to stave off a hostile takeover after being forced by major shareholder Valeant Pharmaceuticals (NYSE:VRX, TSE:VRX) to hold a special shareholder meeting.
Allergan asked the U.S. District Court for the Central District of California for accelerated proceedings in its motion for a preliminary injunction against Valeant, Pershing Square Capital Management and hedge fund manager William Ackman, claiming the activist investors violated insider trading laws and reaped a $1 billion benefit as a result. Pershing acquired 9.7% of AGN’s shares in April.
Allergan aims to prevent its rivals from voting their shares in the upcoming special shareholder meeting slated for December 18. The device maker was forced to schedule the meeting after Valeant and Pershing hand-delivered documents to Allergan headquarters last week showing that they had garnered enough support from other shareholders.
The aggressive acquirers also filed a lawsuit asking a Delaware judge to order Allergan to hold the meeting, where Valeant aims to unseat most existing board members in order to push through an unrequited $53 billion acquisition. Allergan has for months been dodging advances from Valeant and Pershing, saying that the companies’ unsolicited $53 billion offer "is grossly inadequate and substantially undervalues Allergan." Earlier this month, news broke that Allergan approached Salix Pharmaceuticals (NSDQ:SLXP) about a potential merger in further efforts to stymie the takeover bid.
Read more about the Allergan-Pershing-Ackman saga.
Allergan’s new tactic includes accusing Valeant, Pershing and Ackman of acquiring AGN shares unlawfully.
"Pershing Square, Mr. Ackman, and Valeant violated insider trading laws and failed to provide full and fair disclosure to Allergan’s stockholders," according to an Allergan statement. "The complaint alleges that Valeant, who is the ‘offering person,’ took substantial steps to commence a tender offer for Allergan and tipped Mr. Ackman (and entities he controls) – the ‘other person’ – to those undisclosed intentions. The complaint further alleges that Mr. Ackman then traded in Allergan securities on the basis of this material, nonpublic information, reaping more than $1 billion in paper profits from unsuspecting stockholders who were unaware of the upcoming offer."
AGN shares were down about 1% today, trading at $162.76 as of about 4:20 p.m. EST. The stock has gained 46.5% since the start of the year.
