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.


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