Pershing Square Capital Management, L.P. (“Pershing Square”) announced today that an affiliate has filed a lawsuit in the Delaware Court of Chancery seeking a declaratory judgment confirming that its actions in connection with the solicitation and receipt of revocable proxies to call a special meeting of shareholders of Allergan, Inc. (“Allergan”) (NYSE:AGN) will not trigger Allergan’s recently adopted poison pill.
Allergan’s defensive reaction to the business combination transaction proposed by Valeant Pharmaceuticals International, Inc. (“Valeant”) (NYSE:VRX) has raised speculation that Allergan might try to assert that a shareholder’s compliance with the unprecedented procedures in Allergan’s bylaws somehow triggers the poison pill. Using a poison pill to silence shareholders or prevent them from exercising their voting rights is unlawful. In light of Allergan’s actions to date, and in order to remove any concern shareholders might have in participating in calling for a special meeting, Pershing Square had no alternative but to take this action.
The lawsuit followed a request by Pershing Square on June 6, 2014 to Allergan seeking confirmation that Allergan would not use its poison pill to frustrate its own bylaws and impede the calling of a special meeting. A response from Allergan’s counsel on June 11, 2014 failed to provide the confirmation requested.
“We regret that we were forced to file this lawsuit. Allergan’s failure to confirm that its poison pill does not apply to the actions taken in furtherance of calling a special meeting is a blatant attempt to frustrate shareholders’ ability to express their views and exercise their rights,” said William A. Ackman, CEO and founder of Pershing Square.
The complaint can be found here:
About Pershing Square
Pershing Square Capital Management, L.P. ("Pershing Square"), based in New York City, is a SEC-registered investment advisor to private investment funds. Pershing Square manages funds that are in the business of trading — buying and selling — securities and other financial instruments. A fund managed by Pershing Square is Allergan’s largest shareholder with an approximately 9.7% ownership stake.