Allergan, Inc. AGN (“Allergan” or the “Company”) today commented on
the ruling in the United States District Court for the Central District of
California in the Company's federal securities litigation against Valeant
Pharmaceuticals International, Inc. (“Valeant”), Pershing Square Capital
Management, L.P. (“Pershing Square”) and its principal, William A. Ackman.
In the ruling, the Court found that Allergan raised serious questions as to
whether Valeant and Pershing Square violated SEC Rule 14e-3, which prohibits
trading on the basis of material nonpublic information when an offering person
has taken a substantial step or steps to commence a tender offer of a target
company. Specifically, the Court found Allergan's argument “persuasive
because, in promulgating Rule 14e-3, the SEC was concerned about the practice
of ‘warehousing' (the practice of the tender offer or intentionally leaking
information to institutional investors to allow those other entities to make
early trades before other investors heard about the tender offer) because such
a practice is unfair to investors who are trading at an informational
disadvantage.”
The Court ordered that Valeant and Pershing Square must make “corrective
disclosures to their September 24, 2014 proxy solicitation statement in
compliance with Section 14(a) of the Securities Exchange Act and Rule 14a-9
promulgated thereunder, including disclosure of the facts underlying
Defendants' exposure to liability under Section 14(e) of the Securities
Exchange Act and Rule 14e-3 promulgated thereunder.” Specifically, the Court
ordered that Pershing Square and Valeant must disclose that:
* “Pershing Square and Valeant's February 25 Relationship Agreement included
an agreement that Pershing Square and Valeant agreed to be called
“co-bidders” if the Allergan-Valeant transaction occurred by way of tender
offer.
* Allergan and Karah M. Parschauer's federal lawsuit against Pershing
Square, Valeant, and PS Fund 1 alleged that they violated Rule 14e-3 by
causing PS Fund 1 to acquire Allergan shares between February and April
2014 without publicly disclosing information about Valeant's plans for a
tender offer.
* The Court found that Plaintiff Parschauer raised serious questions as to
whether Defendants' conduct between February and April 2014 violated Rule
14e-3.”
The Company issued the following statement:
“We are pleased that the Court ruled there are serious questions as to the
merits of Allergan's insider trading case against Pershing Square and Valeant,
and ordered them to revise their disclosures to reflect the truth behind their
hostile acquisition plan.
The Allergan Board of Directors is strongly committed to protecting the
stockholder franchise and believes it is important that the rights of the
Company's stockholders not be infringed by the actions of one hedge fund that
significantly profited (to the detriment of other stockholders and the market)
by trading in Allergan securities while in possession of material non-public
information regarding Allergan.
The Allergan Board has a duty to ensure that any stockholder voting on
corporate matters acquired their shares in accordance with the law and will
file an emergency appeal with the United States Court of Appeals for the Ninth
Circuit asking them to bar Pershing Square from voting its illegally acquired
shares at the Special Meeting.”
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