Boston, MA 06/05/2014 (wallstreetpr) – Allergan, Inc. (NYSE:AGN) came under pressure after William Ackman, the activist investor and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) paved way for $52.7 billion takeover on June 2, 2014.
The Act of Informal Shareholder Referendum
With this, the plans of informal shareholder referendum were also dropped. It was said that the informal shareholder referendum would estimate the approximate amount demanded by the Allergan, Inc. (NYSE:AGN)’s shareholders for the deal. This was the first-of-its-kind referendum, which would have otherwise also remained non-binding. The referendum was seen as a plot to distract the shareholders and was, therefore, also ignored by the management of Allergan, Inc.
Allergan Shareholders’ Concern
There was a rising concern among the shareholders of Allergan that participation in the informal shareholder referendum would lead to dilution of rest of the shareholders and so, the deal would become impossible.
Abandoned Plans for the Referendum; Special Meeting to be Held
William Ackman and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) have now dropped the plan of referendum and are rather focusing on a special meeting. The focus of the special meetings would be the election of a brand new Allergan board.
Mounting Pressure on Management of Allergan
This act would lead to a rising pressure on the management of the company. However, Allergan, Inc. (NYSE:AGN) still has the time to plan its further course of action because William Ackman said that the meeting would take place on August 7, 2014. The new approach of William Ackman and Valeant Pharmaceuticals International came after the two increased their offer for takeover of Allergan twice in the last week of May 2014. It is quite surprising that Allergan was not even given the opportunity to respond.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) increased its offer to $58.30 in cash. At the same time, the offer was 0.83 of a Valeant share for every unit of Allergan, Inc. (NYSE:AGN)’s stock. This was worth approximately $49 billion.