Wake up, Ackman tells Allergan's board. He has a 50%-60% chance of replacing you

Bill Ackman

It's been 5 months since activist investor Bill Ackman and Valeant ($VRX) teamed up to make their first play for Allergan ($AGN). And after nearly half a year of lawsuits, barb trading and vying for investor favor, Ackman now says it's time for the Botox maker's board to "wake up."

In a Tuesday letter, Ackman urged Allergan's directors to listen to what Valeant's putting on the table and assured them that they could still "rescue" their reputations by taking over leadership from CEO David Pyott, Reuters reports.

"Your actions have wasted corporate resources, delayed enormous potential value creation for shareholders, and are professionally and personally embarrassing for you," he wrote, calling Allergan's battle for independence "the most shareholder-unfriendly, hostile defense process perhaps in the history of corporate America."

And if they don't come around on the deal? Their jobs could go the way of their reputations, in Ackman's eyes. As part of the duo's hostile takeover attempt, Ackman drafted a slate of deal-friendly directors back in July that he hopes to instate at a special shareholder meeting in December.

The way BMO Capital Markets analyst Alex Arfaei sees it, he's got decent chances. Valeant and Ackman have a 50% to 60% chance of winning enough support to replace the majority of the board, he believes, despite the fact that only 33.8% of shareholders voted to call the special meeting itself.

"We believe that the reported 33.8% shareholder support for the special meeting solicited by Pershing Square is impressive given the 'myriad of significant and ongoing administrative hurdles' in Allergan's bylaws," Arfaei wrote in a note to clients, citing commentary from proxy advisory firm Glass Lewis. "Given these hurdles, the ~34% probably understates the level of support for the meeting and the deal."

- get more from Reuters

Special Reports: Pharma's top 10 M&A deals of 2013 - Valeant/Bausch + Lomb | The most influential people in biopharma today - J. Michael Pearson, Valeant | 20 Highest-Paid Biopharma CEOs of 2012 - David Pyott, Allergan

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