Ackman Says Valeant No ‘Bad Rollup Co.’

Jun 9 2014 | 10:42am ET

Pershing Square Capital Management founder William Ackman took to the airwaves to defend Valeant Phamaceuticals International’s bid for Allergan Inc.—and the company itself.

Ackman told CNBC that the major shareholders he met with last week said they would support a bid for $180 per Allergan share—roughly the value of Allergan’s latest offer. And he rejected Allergan’s contention that Valeant is nothing more than a “serial acquirer” whose strategy is unsustainable.

“A bad rollup is a company that uses an over-inflated stock price and a high multiple and non-cash GAAP earnings, heavily promoted by a CEO, to acquire companies at lower multiples,” Ackman said. By contrast, Valeant is more like Berkshire Hathaway, “Colgate or Procter & Gamble.” And he turned the tables on Allergan’s contention that it is more research-and-development-focused than Valeant, noting that Allergan acquired its flagship product, Botox.

“Those kind of finding alternative therapeutic uses—extending the life of the product—that is very cost-effective R&D” and very similar to Valeant, Ackman said.

Ackman also discussed his continuing short bet against Herbalife Inc., noting that Pershing Square is down, but poised to make a $2 billion profit should federal regulators shut the nutritional supplements company down. And he said he’d like to see his former bitter rival sell his holdings of the company.

“I’d love to find” Carl Icahn “a way out of Herbalife, because I think if he could get out now he’d have a very nice profit,” Ackman said. And he credited his Valeant-Allergan play with brining about his rapprochement with Icahn.

“We had a year of sort of hating each other,” Ackman said. But Icahn “was very sweet to me on your network” about Valeant, leading to the phone call that ended their feud.


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

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.