Ackman Rips Allergan Chief Pyott For 'Disabling Conflict Of Interest'
Pershing Square founder Bill Ackman. (AP Photo/The Canadian Press, Pawel Dwulit, File))Things are getting personal in the three-way fight for the future of Botox-maker Allergan .
Hedge fund manager Bill Ackman, whose Pershing Square owns 9.7% of Allergan, fired off a scathing letter to the company's lead independent director Michael Gallagher, railing against Chairman and CEO David Pyott's 'disabling conflict of interest' when it comes to evaluating the $46 billion takeover offer that is on the table from Valeant Pharmaceuticals Valeant Pharmaceuticals .
Ackman, who is working in concert with Valeant and its chief Michael Pearson in their pursuit of Allergan, says that Pyott's conflict 'arises from the fact that he will lose his leadership role at the company and likely his job as a result of the transaction.'
The letter goes on to cite 'numerous Allergan shareholders' who have told Ackman that Pyott has denigrated Valeant's business model and criticized Pershing Square.
'Allergan shareholders have also received the strong impression from Mr. Pyott that he intends to take a 'scorched earth' approach to a potential transaction with Valeant,' Ackman writes, 'and appears to be motivated more by personal animus than by what is in the best interest of Allergan shareholders.'
For its part, Allergan responded by pointing out Ackman's own conflicts in the matter. '[A]s a co-bidder with Valeant Pharmaceuticals, we believe that Mr. Ackman's views and interests are not aligned with those of other Allergan stockholders,' the company said in a statement Monday. 'Nothing has changed since May 12 when, after a comprehensive review, conducted in consultation with its financial and legal advisors, the Allergan Board unanimously concluded that Valeant's proposal substantially undervalued Allergan, created significant risks and uncertainties for the stockholders of Allergan, and was not in the best interests of the Company and its stockholders.'
Ackman, who has called for a shareholder referendum that would allow Allergan's other investors to vote on whether the company should engage in further discussions with Valeant, also made reference to his efforts to oust former Procter & Gamble Chairman and CEO Robert McDonald and replace several board members at railroad operator Canadian Pacific.
The proposal Allergan rejected offered $48.30 in cash and 0.83 of a Valeant share for each share of Allergan. At Monday morning's prices, with Valeant down slightly at $126.50 in morning trading, the bid was worth $153.30 per share, or a bit less than $46 billion. Allergan shares, down 0.3% Monday morning, currently fetch $159.48 apiece.
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