Water under the bridge: Allergan, Ackman drop hostile takeover lawsuits
- Allergan has dropped the suit it filed against Pershing Square owner/activist Bill Ackman and Valeant on August 1, 2014, in a California federal court.
- The suit was part of an escalation of heated activity after Valeant and Ackman made an unsolicited, hostile bid for Allergan earlier in 2014.
- Not only did Allergan drop its insider trading lawsuit against Ackman and Valeant, but in turn, Ackman and Valeant dropped their counterclaim accusing Allergan and its board of directors of making false claims.
At the height of the debacle between Valeant/Pershing and Ackman it was high drama on an ongoing basis. Regarding the lawsuit, Allergan claimed that Pershing Square bought about $3.2 billion in stocks and securities between February 2014 and April 2014 with full knowledge of Valeant's plans to announce a takeover bid at the end of April.
That, in turn, allowed Ackman and Pershing Square to take advantage of a $1.2 billion stock appreciation after the takeover was announced and deprived selling stockholders the opportunity to profit from the bid. Allergan wanted the District Court to declare that Pershing's actions amounted to insider trading and violated disclosure laws, and explicitly asked the court to take back the shares Pershing bought between February and April.
The saga ended when Actavis stepped in an bought Allergan for $70.5 billion in November 2014. Now Allegan has voluntarily dismissed its claims. An end to a truly dramatic M&A stand-off.