http://blogs.wsj.com/moneybeat/2014...t-make-a-strategic-error-in-its-allergan-bid/
As Valeant contemplated an unsolicited stock and cash bid for Allergan last winter, it appears to have made a strategic decision that has subjected it to substantial delays and sustained attacks by Allergan. Valeant’s choice to team up with Pershing Square Capital Management LP and allow it to secretly accumulate almost 10% of Allergan’s shares before pursuing a hostile deal looks like it has resulted in a lot of waiting and a lot of pain
But in the end, the arrangement appears to have caused Valeant to miss an opportunity to capitalize on Allergan’s weak takeover defenses.
As I have previously written, pressure from activists, institutional investors and proxy advisory firms has largely resulted in Allergan gutting its takeover defenses over the last several years. But waiting to allow Pershing Square to accumulate stock drove Valeant right into the one area where Allergan has some residual defenses: shareholder efforts to replace directors between annual meetings.
As Valeant contemplated an unsolicited stock and cash bid for Allergan last winter, it appears to have made a strategic decision that has subjected it to substantial delays and sustained attacks by Allergan. Valeant’s choice to team up with Pershing Square Capital Management LP and allow it to secretly accumulate almost 10% of Allergan’s shares before pursuing a hostile deal looks like it has resulted in a lot of waiting and a lot of pain
But in the end, the arrangement appears to have caused Valeant to miss an opportunity to capitalize on Allergan’s weak takeover defenses.
As I have previously written, pressure from activists, institutional investors and proxy advisory firms has largely resulted in Allergan gutting its takeover defenses over the last several years. But waiting to allow Pershing Square to accumulate stock drove Valeant right into the one area where Allergan has some residual defenses: shareholder efforts to replace directors between annual meetings.