Valeant ally Ackman pares down stake for tax savings

Activist investor and one-time Valeant ($VRX) deal partner Bill Ackman has been pretty gung-ho about the Canadian pharma as an investment prospect, even as controversy has battered its shares. Now, though, he's paring down his hedge fund's stake.

Ackman's Pershing Square Capital Management sold about 5 million Valeant shares between Dec. 24 and Dec. 31 for tax reasons, Bloomberg reported last week. The move created a tax loss for investors in two accounts; annual losses on investments can be used to lower investors' total U.S. taxes in some instances, the news service notes.

Now, Pershing has 8.5% of Valeant's shares in its pocket--down from 9.9%--making it the second-largest shareholder behind Ruane Cunniff & Goldfarb Inc., Bloomberg says.

Bill Ackman

Ackman has stood steadfastly by Valeant through some tough times in recent months. In October, amid price-hike backlash from politicians and allegations that Valeant used its specialty pharmacy relationships to inflate its top line, he held a four-hour conference call to argue that the stock was undervalued. Later, he publicly expressed his confidence in Valeant CEO J. Michael Pearson and raised Pershing Square's stake in the drugmaker, taking it to that 9.9% mark from a 5.7% holding the firm disclosed in September.

But all the support has come amid a tough year for Ackman's own firm, which has suffered alongside Valeant. After hitting a record closing high of $262.52 on Aug 5, the Quebec-based drugmaker's shares were down to $98.54 at press time Monday.

Those shares took another beating last week, when the company announced that CEO J. Michael Pearson--hospitalized with severe pneumonia--would be taking a medical leave of absence. To fill the void in the interim, the company's board created an Office of the Chief Executive Officer, composed of General Counsel Robert Chai-Onn, Company Group Chairman Ari Kellen and CFO Robert Rosiello.

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