Ackman's crusade for Valeant-Allergan combo gets a key nod from proxy advisers

Bill Ackman

Bill Ackman hasn't rounded up enough support to call the special meeting of Allergan shareholders that's crucial to Valeant's buyout bid. But now, he's got a proxy advisory firm to back his cause.

Monday, Glass Lewis urged Allergan ($AGN) shareholders to join Ackman in calling for a special meeting, Reuters reports. Ackman's Pershing Square hedge fund is Allergan's largest shareholder, and has teamed up with Valeant ($VRX) on the buyout attempt.

"We are inclined to suggest shareholders would be best served setting aside the aforementioned risks in favor of the Pershing Square Written Request effort," Glass Lewis said in a report seen by the news service.

Ever since Allergan spurned Valeant's sweetened $54 billion takeover bid, Ackman has been pushing for a special meeting. There, he hopes to overturn Allergan's board and instate a slate of directors more deal-friendly than the current group. But first, he needs investors holding 25% of all shares on his side.

Though Valeant CEO J. Michael Pearson has hinted that he expects Valeant to prevail if it reaches the special meeting stage, Glass Lewis noted that calling for the meeting would not necessarily equate to backing the buyout.

"We note the current process--as presently framed--does not represent a vote on the merits of any prospective combination transaction or any change to the sitting board; rather investors would only be participating in a process intended to afford them the opportunity to directly express their opinions--positive or negative--on those issues," Glass Lewis wrote, as quoted by Reuters.

Of course, that special meeting--even if requested--may not come anytime soon. Friday, Allergan sued Ackman and Pershing Square Capital Management for violating securities laws, claiming he engaged in insider trading while in collusion with the Canadian drugmaker.

While Allergan insists the lawsuit is in investors' best interests, some see it as a tactic to delay the special meeting or deny it altogether. After all, Allergan's bylaws require any shareholder seeking a special meeting to comply with all requirements of the law, The Wall Street Journal's MoneyBeat points out.

Whether that's the California company's intent, it just might be the outcome of the litigation, BMO Capital Markets analyst David Maris wrote in a recent note to clients. "Although Allergan is seeking an expedited review, we do not think it is likely to be resolved until 2015," he said.

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