(Reuters) – Pershing Square Capital Management and Valeant Pharmaceuticals (NYSE:VRX, TSE:VRX) may be able to vote at a special meeting of Allergan (NYSE:AGN) shareholders in which they are seeking to remove 6 of 9 Allergan board members, a California court said today ruling partly for and partly against each side.
The decision was part of an insider trading suit filed by Botox maker Allergan that sought to block activist investor William Ackman from voting his nearly 10% stake in the company at the meeting, scheduled for Dec. 18.
The court said that Pershing Square and Valeant must disclose details about their joint takeover offer and the insider trading suit filed by Allergan against the companies.
The ruling enjoins the firm from voting based on their current disclosure statement, but provides them a road to taking part in the vote by making the proposed "corrective" disclosures and submitting them to the court for review.
Allergan pledged to file an emergency appeal with the U.S. Court of Appeals for the 9th Circuit "asking them to bar Pershing Square from voting its illegally acquired shares at the special meeting."
"We are pleased that the court ruled there are serious questions as to the merits of Allergan’s insider trading case against Pershing Square and Valeant, and ordered them to revise their disclosures to reflect the truth behind their hostile acquisition plan. The Allergan board of directors is strongly committed to protecting the stockholder franchise and believes it is important that the rights of the company’s stockholders not be infringed by the actions of one hedge fund that significantly profited (to the detriment of other stockholders and the market) by trading in Allergan securities while in possession of material non-public information regarding Allergan," the Irvine, Calif.-based company said in a press release.
"Today’s ruling is a victory for all Allergan shareholders as it puts the choice of Allergan’s future in the hands of its owners," countered Valeant chairman & CEO Michael Pearson. "We look forward to the Dec. 18 special meeting, where we hope to move a large step closer to the compelling combination of Valeant and Allergan that will create an unrivaled platform for growth and value creation."