The ongoing back-and-forth battle to either speed up or halt Valeant Pharmaceuticals International’s hostile takeover attempt of Allergan shows no sign of concluding any time soon.
Allergan has confirmed that it received written requests from its stockholders regarding Pershing Square Capital Management’s push to call a special meeting of the shareholders.
At the special meeting, Allergan stockholders would be asked to remove most of the company’s existing directors in connection with Valeant’s unsolicited bid to acquire all outstanding common shares of Allergan for 0.83 shares of Valeant common stock and $72 in cash.
According to the company, Allergan and an independent inspector will review the written requests submitted by Pershing Square, and then “promptly” report the results.
The written requests are from 31% of shareholders in favor of the meeting, which surpasses the 25% threshold required by Allergan’s corporate bylaws.
In considering whether to submit written requests, shareholders were asked to decide if they wanted the opportunity to vote on the offer at a later date-not to evaluate the merits of the offer itself.
According a prepared statement, Allergan claimed “many stockholders have explicitly conveyed their view that the requests are not an endorsement of Valeant’s offer.
“Allergan recognizes that this is all about stockholder value, and the board remains confident in the company’s ability to create significantly more value than Valeant’s offer,” the statement continued. “While Allergan does not believe that Valeant’s offer provides compelling value relative to the alternatives available to the company, the Allergan Board of Directors fully supports the right of stockholders to vote on the value proposition offered by Valeant at the appropriate time.”
Additionally, Allergan was also delivered a blow to its attempt to sue Valeant and Pershing Square for insider trading, as a U.S. federal judge has refused to grant its request to expedite its civil suit against the two companies.
Allergan filed the lawsuit earlier this month, claiming that between February and April of this year, Pershing Square purchased Allergan stock and securities worth more than $3.2 billion while “fully aware” of Valeant’s non-public takeover intentions.
In the ruling, Judge David Carter said the District Court for the Central District of California “would be reluctant to create a precedent that allows corporations to demand at will the immediate attention and input of the federal courts in order to resolve intra-corporate disputes that might be better left to the dynamic free market or to the state court.”
In response to the ruling, Allergan said the court “outlined a path . . . toward a prompt ruling on the merits of this case consistent with (our) stated desire.”
Valeant issued its own statement following the ruling, explaining that the company is “pleased that this attempt by Allergan . . . to delay the special meeting was not successful.”
Coincidently, while rumors recently ran rampant that Allergan is looking to further prevent the hostile takeover by approaching Salix Pharmaceuticals and at least one other drug maker regarding a possible acquisition, according to FirstWord Pharma, Allergan is not currently in discussions to buy Salix.
However, the companies have been in contact in recent months about a deal, Bloomberg reported.
Because the discussion is now dormant, Bloomberg reported that Allergan is weighing other options, although the Salix talks could resume.
David Pyott, Allergan’s chief executive officer, confirmed last month that the company is seeking acquisitions and “has a lot of options.” In response, Michael Pearson, Valeant’s chief executive officer, suggested that if Allergan reaches a deal, it could “force us to walk.”
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