Paulson Buys Allergan Shares, Backs Valeant Deal

Jun 26 2014 | 11:05am ET

Valeant Pharmaceuticals International and Pershing Square Capital Management have a new ally in their effort to win approval for the former’s $53 billion offer for Allergan Inc.: Paulson & Co.

The hedge fund has bought up a roughly 2% stake in Allergan, best known for making Botox, and supports Valeant’s tender offer. The move could push Valeant closer to forcing Allergan to call a special meeting to vote on its hostile offer, which requires the support of investors representing 25% of Allergan’s shares.

Allergan has rejected Valeant’s approaches, saying they undervalue the company and criticizing its rival’s business model. Valeant CEO Michael Pearson has countered that a majority of Allergan investors—including large, institutional holders such as T. Rowe Price—back the deal.

Pershing Square, which is working with Valeant on the bid and which has threatened to seek the ouster of a majority of Allergan’s board at its next general meeting, owns just under 10% of Allergan shares.

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