Allergan Inc. has fired back at activist investor Bill Ackman over his letter castigating its board for refusing to negotiate with hostile takeover bidder Valeant Pharmaceuticals International Inc.
Mr. Ackman's letter slams the board for allegedly violating its fiduciary duty by not sitting down with Valeant to discuss its $53-billion (U.S.) offer and driving down Valeant's stock price with a "scorched earth, negative information campaign against Valeant."
Mr. Ackman's firm, Pershing Square Capital Management LP, is a partner with Laval, Que.-based Valeant in a bitter takeover attempt.
"Pershing Square's letter to the Allergan board is not based on facts, and is rooted in self-interest and innuendo," says Allergan's response, issued Wednesday.
"Mr. Ackman is simply trying to distract Allergan stockholders from the fact that the Valeant proposal is grossly inadequate and substantially undervalues Allergan."
Pershing Square has agreed to exchange its Allergan shares – it owns about 10 per cent of the stock – for a fixed number of Valeant shares and will thus benefit, to the detriment of all other Allergan shareholders, if Valeant pays less for Allergan, says the Allergan response.
"Mr. Ackman is clearly interested in providing only self-serving negotiating advice while the Allergan Board is focused on pursuing the most attractive course of action for all Allergan shareholders."
The unsolicited bid for Botox-maker Allergan was unveiled in April and the two sides have been trading salvos ever since.
Pershing Square is trying to call a special meeting of Allergan shareholders in order to remove six of the California-based company's nine directors.