Allergan Seeks Expedited Procedure in Valeant Lawsuit

Allergan, Inc. has asked the United States District Court for the Central District of California to set an expedited schedule for discovery and a motion for a preliminary injunction against Valeant Pharmaceuticals, Pershing Square Capital Management, L.P. (Valeant’s largest shareholder), and its principal, William A. Ackman , for violations of federal securities laws. The move comes as part of an ongoing effort by Valeant Pharmaceuticals to acquire Allergan. In June 2014, Valeant made an unsolicited $53-billion bid to acquire Allergan following rejection by Allergan of earlier acquisition proposals by Valeant. In early August 2014, Allergan filed a lawsuit against Valeant, alleging that the company had violated insider trading laws and failed to provide full and fair disclosure to Allergan’s stockholders.

In its preliminary injunction motion, Allergan will seek an order barring Valeant, Pershing Square, Ackman , and entities affiliated with them from exercising any rights or benefits associated with Allergan shares that have been acquired unlawfully. Such an order would prevent Valeant, Pershing Square, and Ackman from voting their shares in any special meeting, according to Allergan. In addition, Allergan announced that it will hold a Special Meeting of Stockholders on December 18, 2014, subject to confirmation by Allergan that the meeting has been validly requested in compliance with Allergan’s bylaws. Allergan has established an October 27, 2014 record date for stockholders entitled to vote at the Special Meeting.

Allergan’s proposed schedule would require expedited discovery to be completed in October 2014, and would set a hearing on Allergan’s anticipated preliminary injunction motion in advance of the company’s Special Meeting. Should Allergan succeed in obtaining a preliminary injunction in its federal lawsuit, Valeant, Pershing Square, and Ackman’s shares will not be counted toward the special meeting request. Allergan’s lawsuit, filed August 1, 2014, alleges that Pershing Square,  Ackman , and Valeant violated insider trading laws and failed to provide full and fair disclosure to Allergan’s stockholders.

At the Special Meeting, Allergan stockholders would be asked, among other things, to remove a majority of the company’s existing directors in connection with Valeant’s unsolicited exchange offer to acquire all outstanding common shares of Allergan for 0.83 shares of Valeant common stock and $72.00 in cash, or subject to proration, an amount of cash or a number of Valeant common shares with the implied value set forth in the exchange offer.

“The Allergan Board of Directors continues to believe that Valeant’s unsolicited exchange offer is grossly inadequate and substantially undervalues Allergan,” said Allergan in an August 26, 2014 statement. “The Allergan Board remains focused on enhancing value for stockholders, and is confident in the Company’s ability to create significantly more value than Valeant’s offer.”

Source: Allergan

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