July 17--Activist shareholder William Ackman slammed Allergan Inc. on Wednesday for its "scorched earth" response to an unwanted takeover offer by Valeant Pharmaceuticals. He said the board of the Irvine-based drugmaker board should apologize for its "incredibly inappropriate" tactics and sit down to negotiate a deal with its Quebec-based suitor.
Ackman, who is Allergan's biggest shareholder and Valeant's partner in the hostile bid, said in a letter to the Allergan board that its repeated attacks on Valeant's business strategy and accounting practices were intended to depress the Valeant share price in order to undercut the value of the offer, which is denominated largely in Valeant stock.
"If one spreads false and misleading information for the purpose of driving down Valeant's stock price, that is market manipulation, plain and simple," Ackman wrote.
Allergan shot back, saying Ackman's letter was "rooted purely in self-interest and innuendo" and intended "to distract Allergan stockholders from the fact that the Valeant proposal is grossly inadequate and substantially undervalues Allergan."
Valeant shares closed $2.26, or 1.9 percent, higher Wednesday at $121.71. That put the value of Valeant's bid at $51.4 billion, or $173 a share -- well below the $190 level that Ackman has said Allergan shareholders want. Allergan's share price closed at $165.75, up $1.37 or 0.8 percent on the day.
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