By Rod Nickel
(Reuters) - Activist investor Bill Ackman urged Botox maker Allergan Inc
Ackman's Pershing Square Capital Management hedge fund, Allergan's largest shareholder with a 9.7 percent stake, is attempting to gain support of shareholders owning 25 percent of Allergan to call a special meeting, during which it would seek to remove six directors.
Allergan can delay the meeting until as late as November.
"We, on behalf of Allergan's other shareholders, ask that you do not delay the inevitable any further," Ackman wrote in a letter to Allergan's board, released on Wednesday. "What legitimate board of directors attempts to silence or otherwise delay hearing what its own shareholders have to say?"
Ackman described Allergan's criticism of Valeant as a "scorched earth response" and said spreading false information to drive down Valeant's stock would be market manipulation.
Allergan, known for its Botox anti-wrinkle injections, said that Ackman's economic interests were aligned with Valeant's and he was trying to distract Allergan shareholders from the fact that Valeant's offer is too low.
"Pershing Square’s letter to the Allergan Board is not based on facts, and is rooted purely in self-interest and innuendo," said an Allergan spokesperson.
Laval, Quebec-based Valeant, made an unsolicited cash and stock bid for California-based Allergan in April and has since raised its $51-billion offer.
“I think the path forward for Allergan is to merge with Valeant. That is the strategy that would create the greatest shareholder value, according to our analysis," said Kris Jenner, co-founder of Baltimore-based hedge fund Rock Springs Capital which holds shares in both Valeant and Allergan.
“This is not a popularity contest or a question of which CEO or business model we think is preferable. It’s a quantitative argument about whether Allergan as a standalone company represents the greater value over the next two to three years.”
Allergan shares edged up 0.4 percent to $164.97 in afternoon trading in New York, while Valeant stock added 1.2 percent to $120.91.
(Reporting by Rod Nickel in Winnipeg, Manitoba and Ransdell Pierson and Olivia Oran in New York; Editing by Bernadette Baum)