Pershing Says It Welcomes SEC Review of Allergan Bid

Pershing Square Capital Management LP, which teamed with Valeant Pharmaceuticals International Inc. (VRX) to bid for Allergan Inc. (AGN), said it welcomes a U.S. Securities and Exchange Commission review of its takeover tactics and defended them.

“There is nothing illegal, unethical, or improper in taking a toehold position before a merger is proposed, even if it is not wanted by the target’s management,” the New York hedge-fund firm said today in an e-mailed statement, referring to a stake it took in the Botox maker before the bid. “We welcome the SEC’s review of the facts.”

Allergan, which has refused talks with Valeant, sued on Aug. 1, claiming the Laval, Quebec-based drugmaker colluded with Pershing Square to profit from trades ahead of their bid’s announcement, using insider knowledge of the impending offer. Valeant and Pershing Square called the lawsuit a “desperate attempt to delay or avoid” a shareholder meeting requested by Pershing Square founder Bill Ackman, according to a statement in response to the lawsuit.

The Wall Street Journal reported the SEC’s probe earlier today. Judith Burns, an SEC spokeswoman, declined to comment.

“We have no concerns about the legality of our actions,” said Laurie Little, a spokeswoman for Valeant.

Scott Bisang, a spokesman for Allergan at Joele Frank, Wilkinson Brimmer Katcher, declined to comment.

‘Meticulously Careful’

Pershing Square began buying stock in the anti-wrinkle drugmaker in February, then started purchasing over-the-counter call options in March, amassing almost 10 percent to become Allergan’s biggest shareholder, according to regulatory filings. When Valeant and Pershing Square announced they were teaming up to bid for Irvine, California-based Allergan in April, the stock surged 15 percent, giving the hedge-fund firm a $1 billion gain.

Pershing Square added 28.2 million shares in the second quarter, valuing its holding as of June 30 at about $4.9 billion, according to a filing with the SEC.

Allergan’s lawsuit accused Valeant and Pershing Square of secretly plotting with each other to let the hedge fund buy shares as the tender offer was being put together.

Ackman, 48, said in a letter to his investors yesterday that Pershing Square was “meticulously careful” in its investment and sought advice from outside lawyers on buyout regulations.

“You should know that we and Valeant are well-versed in the takeover and tender-offer rules,” Ackman wrote in the letter, which was obtained by Bloomberg News. “Unfortunately, in America, one can be sued by anyone for anything.”

To contact the reporters on this story: Kelly Bit in New York at; Jesse Westbrook in London at

To contact the editors responsible for this story: Christian Baumgaertel at Heather Smith, Sree Vidya Bhaktavatsalam

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