Activist investor Bill Ackman's $2 billion fallback plan for Valeant
- The Wall Street Journal reports that activist investor Bill Ackman has taken a $2 billion stake in the Pfizer animal Health spinoff Zoetis Inc. All told, Ackman, his firm Pershing Square Capital Management, and another hedge fund run by an Ackman protégé (Sachem Head Capital) have taken a 10% stake in Zoetis.
- The speculation is that Ackman and his associates may force Zoetis into a deal with Ackman-allied Valeant Pharmaceuticals, especially if the investor's seemingly never-ending hostile takeover bid for Botox-maker Allergan crumbles.
- Zoetis had $4.6 billion in sales in 2013 (far and away the most in the industry), and its market value was around $20 billion before the WSJ reported on Ackman's stake.
Neither Ackman nor Zoetis have said much about the speculation surrounding the investor's latest move. But it may just be a turning point in the ongoing saga between Valeant and Allergan.
As far as that takeover bid goes, Valeant recently won a crucial court battle when a federal judge refused to issue an injunction against the company in the face of Allergan's claims that Valeant and Ackman were guilty of insider trading violations. But the judge did say the way things went down raised "serious questions."
Allergan is also reportedly in talks with Actavis for a potential merger. If Ackman finally loses his patience on this one, all eyes will be on Zoetis.
- Wall Street Journal Ackman Takes Stake in Animal-Health Company Zoetis