Allergan's ($AGN) still okay with holding a special shareholder meeting on Dec. 18, a date it last month agreed on with wannabe acquirer Valeant ($VRX). It just doesn't want its pursuer's partner, Bill Ackman, to have a say.
The California drugmaker has asked a judge to prevent Ackman's Pershing Square Capital Management--its largest shareholder--from voting at the meeting on the grounds that he violated SEC rules when acquiring his Allergan stake. A federal court in California, where Allergan is litigating claims that he committed insider trading, will hear the request on Oct. 28.
Allergan has good reason to want to strip Ackman of his voting power; at the meeting, shareholders will decide whether to stick with the company's current board or send 6 members packing in favor of a new slate, proposed by Ackman, that will likely look more fondly on Valeant's hostile takeover bid.
And as Allergan has insisted time and again since the Canadian pharma first approached it in April, that's a bid that "substantially undervalues" the company.
"Allergan's stockholders, and Allergan itself, will be irreparably harmed if defendants are permitted to tip the playing field in their favor using Pershing Square's ill-gotten shares," its motion for a preliminary injunction reads.
As such, Allergan has done what it can over the past several months to delay or stop the meeting, including filing the insider trading suit. It's also embarked on a restructuring and pursued potential deals of its own to try to turn investors' favor and foil Valeant's plans.
But it's unclear whether some of its largest shareholders feel the same way about Valeant and Ackman's proposal. Late last month, three top-15 investors urged the Botox-maker to delay any M&A of its own that could thwart the deal until after they'd had a chance to vote.
"Over the past several months, we have been watching with growing concern the corporate governance practices of the Allergan board," Bill Benintende, a spokesman for No. 3 shareholder T. Rowe Price, said in a statement seen by Bloomberg.
- see Bloomberg's take
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