Hedge-fund Heavyweight Buys More than 6M Shares of Allergan (AGN) Stock

Wall Street

Reuters is reporting that billionaire hedge fund manager John Paulson has bought more than 6 million shares of Allergan, Inc. (AGN), or about a 2% stake, and supports a deal between the Botox maker and Valeant Pharmaceuticals Inc (VRX).

Back in April, Pershing Square’s Bill Ackman, who holds a 9.7 percent stake, or 28,878,538 shares in Allergan, teamed up with Valeant Pharmaceuticals to pursue an hostile takeover of the maker of cosmetology blockbuster Botox.

So far, Allergan’s board has rejected Ackman’s-Valeant’s $53 billion cash-and-stock bid for the company, calling it “grossly inadequate”.

“The board strongly recommends that Allergan stockholders reject Valeant’s exchange offer and prevent Valeant from taking control of Allergan at a price that does not appropriately reflect the underlying value of Allergan’s assets, operations and prospects,” Allergan Chairman and CEO David Pyott said in a statement recently. “The board continues to be confident that Allergan will create significantly more value than Valeant’s proposal.”

But Paulson’s new stake in Allergan could give Valeant a boost, as the company gets closer to its goal of rounding up support from at least 25 percent of Allergan shareholders so that it can call a special meeting.

Valeant Pharmaceuticals CEO Michael Pearson said in an interview Tuesday that once Valeant gets the 25% of Allergan shareholders needed to convene the vote, “both sides know how this will come out.”

Following the Paulson news, Allergan shares closed up 2.25 percent at $169.07, while Valeant shares closed up 4.5 percent at $125.94, both on the NYSE.

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