Activist Investor Bill Ackman Wants Auction for Allergan

Activist hedge-fund manager Bill Ackman on Friday urged Botox maker Allergan Inc. to put itself up for auction.

The request follows Allergan’s disclosure that it is in talks to potentially merge with a firm other than the Canadian company Ackman has backed in a bruising takeover battle.

Ackman’s hedge fund, Pershing Square Capital Management, is working with Valeant Pharmaceuticals International Inc. to purchase Allergan. However, Allergan has consistently rebuffed Valeant’s proposals, including the most recent cash-and-stock offer, valued at more than $54 billion.

“Now that Allergan has two interested bidders, it can best maximize the outcome for shareholders by running an auction where neither party is the favored bidder, and both are encouraged to offer maximum value,” Ackman said in a letter to Allergan’s board.

In response, Allergan said it would consider a higher offer from Valeant, but that the firm’s offers so far “have been grossly inadequate and significantly undervalue Allergan.”

On Thursday, Irvine, Calif.-based Allergan said in a regulatory filing that it’s discussing a merger with an unnamed firm and that the talks could lead to negotiations.

It did not disclose the suitor. However, Bloomberg News reported that Allergan is actively discussing a potential deal with Actavis Inc., citing unnamed sources.

The Irish pharmaceutical company has been widely reported as having an interest in Allergan.

On Friday, Allergan shares fell $1.40, or 0.7 percent, to $196.

This article appeared in print in the November 10th, 2014 edition of Hamodia.