The Morning Brief: Pershing Square Sues Allergan in Takeover Bid
The Valeant/Allergan takeover attempt just got uglier. William Ackman’s Pershing Square Capital Management has filed a lawsuit against Allergan in the Delaware Court of Chancery seeking confirmation that calling a special meeting of shareholders will not trigger Allergan’s recently adopted poison pill. In its announcement, the activist hedge fund firm, which has teamed up with Valeant Pharmaceuticals to make an unsolicited takeover offer for the Botox maker, is concerned that under Allergan’s bylaws the special meeting, designed to change the board’s directors, may trigger the pill and dilute its stake.
Pershing Square owns nearly 10 percent of Allergan and under Allergan’s by-laws at least 25 percent of shareholders must call for the special meeting. The pill would be triggered if a shareholder or group of investors acquired more than 10 percent of the stock. Ackman says he has asked Allergan for clarification on this issue but has not received a response. “We regret that we were forced to file this lawsuit,” Ackman states in a press release, calling Allergan’s non-response “a blatant attempt to frustrate shareholders’ ability to express their views and exercise their rights.”
Pine River Capital Management is closing its multi-strategy Pine River Fund to new investments, according to the Financial Times. The Minnetonka, Minnesota firm, founded by Brian Taylor, cited low volatility and central bank intervention in the markets, according to the paper. Last year, the $4.5 billion fund gained 10 percent. It is up 1.4 percent so far this year, according to the report.
Shares of hedge fund favorite Priceline Group dropped nearly 2 percent Friday after the Internet travel giant announced that it will acquire restaurant booking service OpenTable for about $2.6 billion in cash. The price works out to a 48 percent premium to OpenTable’s Thursday closing price. At the end of the first quarter, John Thaler’s Greenwich, Connecticut–based JAT Capital Management owned 3.41 percent of OpenTable’s shares, while Daniel Benton’s Rye Brook, New York-based Andor Capital Management owned 3.19 percent of the shares, its eighth largest holding.
Ricky Sandler’s Eminence Capital disclosed that it boosted its stake in Fossil Group, Inc. by one-third, to 2.4 million shares, or 5.1 percent of the total outstanding. The investment in the watch, handbags and accessories maker was filed with a 13G, which means the position is passive. Eminence also boosted its stake in Allscripts Healthcare Solutions, a healthcare information technology company, to 5.1 percent. This investment is also passive.