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

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...