Allergan plc AGN’s board of directors fielded criticism Tuesday for diminishing share value with a “half-hearted strategic review” and for touting an arbitrary debt-reduction goal to justify acquisition pursuits.
“It is now clear that fresh thinking is absent from the current regime, thus explaining the market's complete loss of confidence in the stock,” Appaloosa and Senator Investment Group wrote in a joint letter.
Allergan's stock rose more than 2 percent to trade around $154.61 at time of publication.
What's Next
The shareholders urged Allergan to take tangible steps forward by breaking up the offices of CEO and chairman; appointing a new, external chairman or CEO; supplanting at least two board directors; and replacing management in critical segments.
Additionally, they called for executives to abandon acquisition strategies to instead focus on existing pharmaceutical and aesthetics lines.
“Prioritizing such flexibility at this time makes no sense given Allergan's undervalued equity currency, its mixed M&A record and the market's loss of confidence in the Company's ability to deploy capital for the benefit of shareholders,” the letter read. “More importantly, it will not address the Company's malaise.”
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