Regulator Approves Pershing Square Allergan Buy

May 5 2014 | 11:32am ET

Pershing Square Capital Management has already made $1.2 billion on its huge stake in Allergan Inc., one which it has now won the green light to finalize.

The New York-based hedge fund built its 9.7% stake in the Botox maker primarily with call options and forward purchase contracts. Federal law requires investors to notify both the Federal Trade Commission and Justice Department about plans to buy voting securities; Pershing Square did so on April 21, and won permission from the FTC last week.

There is normally a 30-day waiting period for such acquiescence; Pershing Square got it within two weeks.

Pershing Square is working with Valeant Pharmaceuticals International on the Allergan deal. Valeant has proposed a $46 billion hostile takeover of Allergan, which Pershing Square supports. Allergan is Pershing Square’s largest-ever investment, and buying the shares it has the right to would take about one-third of its assets under management.

At the moment, the investment is also one of Pershing Square’s most successful: The stock is trading about 34% higher than the hedge fund’s average price. In addition, other hedge funds have leapt into the fray, with Citadel Investment Group, Highfields Capital and Viking Global Investors all buying Allergan stakes recently.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

As initial anxiety over Donald Trump’s victory gave way to market euphoria in the days following the election, there was a casualty. Gold prices.