Valeant Chief ‘Delighted’ By Paulson Backing

Jun 27 2014 | 9:13am ET

Valeant Pharmaceuticals International CEO Michael Pearson pronounced himself predictably “delighted” by the support offered his company’s $53 billion offer for Allergan Inc. by hedge fund Paulson & Co.

Paulson’s roughly 2% stake in Allergan—and its support of the Pershing Square Capital Management-backed tender offer—were revealed this week. It gives Valeant nearly half the 25% shareholder support it requires, a “nice starting point,” as Pearson put it, to force a special meeting where a vote can be held on Valeant’s hostile offer.

“We do believe we’ll get the 25% and the majority we need to get this deal consummated,” Pearson told BNN TV in Canada.

Allergan has rejected Valeant’s offer as too low and refused to negotiate, citing concerns over its rival’s business model. And while Valeant and Pershing Square have a powerful new ally in Paulson, Allergan may have seven, in the form of a group of concerned U.S. senators.

The group, which includes Sens. Christopher Coons (D-Del.), Dianne Feinstein (D-Calif.) and Robert Menendez (D-N.J.), have asked the Federal Trade Commission and U.S. Justice Department to look into the proposed deal, and whether it would reduce competition and research while also increasing drug prices. The senators noted “a growing trend in the pharmaceutical industry whereby companies make acquisitions, eliminate drug pipelines, slash R&D budgets and arbitrage location headquarters in order to lower effective tax rates.”

Valeant is based in Québec, Allergan in California.

The senatorial missive is the second of its kind to emerge from Capitol Hill: Last month, Rep. Ed Royce (R-Calif.), whose district sits just north of Allergan’s Irvine headquarters, asked federal regulators to look into Pershing Square’s planned non-binding referendum of Allergan shareholders. That poll has since been dropped in favor of a formal tender offer and proxy contest.


In Depth

FINalternatives Survey: We Asked Investment Pros...

Apr 2 2016 | 9:42pm ET

The data from our annual reader survey continues to roll in and provide interesting...

Lifestyle

Point72's Cohen Donates $275M To Veterans Mental Health Network

Apr 6 2016 | 8:31pm ET

Billionaire hedge fund manager Steve Cohen has formed a non-profit aimed at treating...

Guest Contributor

Agecroft: Why NYCERS Should Reconsider Exiting All Hedge Funds

Apr 18 2016 | 5:51pm ET

The recent decision by the New York City Employment Retirement System to exit its...