Ackman Throws In The Towel, Liquidates Valeant Stake

Mar 13 2017 | 6:27pm ET

By Svea Herbst-Bayliss (Reuters) - Billionaire investor William Ackman walked away from Valeant Pharmaceuticals International on Monday with a roughly $3 billion loss after he sold his entire stake in the ailing drug company after trying to rescue it for some 18 months.

Ackman's Pershing Square Capital Management became one of the firm's biggest investors in 2015 when it sunk some $3.2 billion into the company.

Now he walks away with about $221 million, having sold his entire stake of 18.1 million shares after months of turmoil that have left his fund with two years of double-digit losses and a tarnished reputation.

"We elected to sell our investment and realize a large tax loss which will enable us to dedicate more time to our other portfolio companies and new investment opportunities," Ackman said in a statement.

Pershing Square was Valeant's second largest owner after hedge fund Paulson & Co, a regulatory filing shows. Hedge fund ValueAct Holdings is the third-biggest owner.

Ackman's fund bought into Valeant when the stock was trading near $190 a share and he watched it surge to $260 a share during the summer of 2015. But governmental scrutiny of the company's pricing policies coupled with scandals surrounding Valeant's specialty pharmacy unit, Philidor, caused the stock price to sharply tumble after August 2015.

On Monday, it closed at $12.11 on the New York Stock Exchange, having fallen 16 percent since January even as many other stocks were climbing again, buoyed by hopes of stronger economic growth and increased merger activity.

During his one year on the board, Ackman replaced Valeant's CEO, refreshed the board with 10 new directors and worked to pay down some $2.7 billion in debt through the sale of non-core assets. Still, the company's stock price kept sinking despite hopes that a merger deal might be around the corner.


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