The Morning Brief: Allergan Weighs Valeant, Pershing Square Offer

Valeant Pharmaceuticals International officially launched its exchange offer for Allergan. Valeant, which is teaming up with William Ackman’s Pershing Square Capital Management in the takeover bid, is offering shareholders of the Botox maker $72 per Allergan share in cash and 0.83 Valeant common shares. The offer is scheduled to expire at 5 p.m. on August 15, although the deadline could be extended.

“Valeant expects to complete a second-step merger promptly following the consummation of the exchange offer in order to acquire the remaining Allergan shares,” it states in a press release. Valeant also said Pershing Square continues to call a special meeting of Allergan stockholders. Valeant also said it is still willing to provide shareholders with a contingent value right related to sales of Allergan’s pending eye drug Darpin if it is able to work out a deal with Allergan. In response, Allergan said its board of directors “will carefully review and evaluate” the offer, adding that Allergan stockholders are advised “to take no action at this time pending the review” of the offer.

Millennium Management founder Israel “Izzy” Englander has bought another apartment at the famed Upper East Side building 740 Park Avenue, for $70 million, according to a Wall Street Journal report. He bought the apartment from the French government, which was reportedly asking for $48 million when it was put on the market in April. Englander bought his first apartment there in 2000, according to Michael Gross’ book 740 Park: The Story of the World’s Richest Apartment Building.

Englander, who ranked sixth on Alpha’s Rich List after making $850 million last year, has made $4 billion in the 12 years he has qualified for the annual ranking of the highest earning hedge fund managers. Over the years the 740 Park address has been home to a range of powerful business and political figures, including John D. Rockefeller Jr., Henry Kravis, Ronald Perelman, Saul Steinberg and Jacqueline Kennedy Onassis.

The insider trading trial of Rengan Rajaratnam got underway Wednesday. He is accused of conspiring with brother Raj, founder of the now-defunct Galleon Group hedge fund, who is now serving 11 years in prison for an insider trading scam that netted up to $75 million. Basically, the prosecution is trying to portray the pair as acting like twins, working very closely together.

In opening arguments, defense attorney Daniel Gitner said the brothers were “very different people, led very different lives, lived in very different circles ... and behaved very differently.” Last month the government dropped two of the five charges against Rengan. He is still charged with conspiracy to commit securities fraud and two counts of securities fraud.

Shares of Gap jumped 1.24 percent after they were upgraded to “buy” from “hold” by Canaccord Genuity. The stock, one of four disclosed holdings of Edward Lampert’s ESL Holdings, is up more than 6.6 percent for the year.

Shares of Insmed Inc. surged more than 42 percent Wednesday after it announced the Food and Drug Administration gave its drug, Arikaynce, a Breakthrough Therapy designation for the treatment of adult patients with lung disease. Two of the company’s four largest investors are hedge funds. The second largest investor, with 5.13 percent of the shares, is New York–based Deerfield Management, which specializes in health care investments. Englander’s Millennium Management owns 4.19 percent of the stock, making it the fourth largest holder. The stock’s market cap is now close to $700 million.