Pershing Square can go ahead with its call for Allergan shareholder meeting

NEW YORK, N.Y. – Pershing Square Capital Management and Allergan Inc. have reached a deal to allow the activist investment fund to try and call a special meeting of shareholders to oust six directors at the Botox maker.

Pershing is teamed up with Valeant Pharmaceuticals (TSX:VRX) in the company’s hostile takeover for Allergan.

The agreement ensures Allergan’s poison pill defence won’t be triggered by Pershing Square’s efforts to win support to call a meeting.

Pershing, which controls 9.7 per cent of Allergan’s shares, feared that if Allergan investors were seen to be working together, the poison pill would be triggered.

It says the settlement paves the way for it to begin actively soliciting support to call the meeting. Investors holding 25 per cent of Allergan’s shares need to support the move for a meeting to be held.

Allergan has repeatedly refused to meet with Valeant to discuss its more than US$50 billion stock-and-cash bid.

It says the US$72 in cash and 0.83 of a Valeant share for each Allergan share offered undervalues the company and creates significant risks and uncertainties for its shareholders.