Ackman becomes Valeant's 5th largest shareholder with $3.3B gamble
- Activist investor Bill Ackman and his firm Pershing Square now owns 4.9% of Valeant, and Valeant comprises 16.9% of Pershing Square Holdings.
- Pershing Square Holdings is widely recognized as a successful hedge fund and had 40% returns last year.
- Last year, Ackman worked closely with Valeant as it pursued a hostile (and failed) takeover bid for Actavis. During that time, he could not buy more stock; however, once the deal fell apart, he was free to buy more shares of Valeant.
Based on last year's intense showdown between Valeant and Allergan, in which Ackman played a leading role, it would not be surprising if Ackman immediately took an aggressive stance with respect to having Valeant pursue new acquisitions.
However, Ackman seems to be adapting a passive stance as a large investor in Valeant. The activity around Valeant's stock has been intense for the last two weeks, with average daily volume of about 15,000 contracts, which is twice the normal volume for the last 200 days. The stock closed yesterday at $204.69, up a little over 3% in one day.