04 Nov 2014 Cases

Valeant and Pershing Square v. Allergan Takeover Litigation

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In April and May 2014, Valeant made various proposals to acquire Allergan and in June 2014 Valeant launched a tender offer. Entities related to Pershing Square and Valeant purchased approximately 10 percent of the outstanding shares of Valeant prior to the public announcement of various takeover proposals. Allergan subsequently accused Pershing Square of violating Rule 14e-3 of the federal securities laws by trading while in possession of material non-public information about a tender offer after Valeant had taken substantial steps towards launching the Tender Offer. Allergan sought an injunction that would have prevented Valeant and Pershing Square from voting its shares and proxies, preventing the proposed transaction from moving forward.

Compass Lexecon affiliate Professor Robert Daines submitted an expert declaration and testified at deposition that the activities undertaken by Valeant and Pershing Square did not establish that Valeant’s unsolicited merger proposal was a pretense in advance of a hostile tender offer. On November 4, 2014, Judge Carter of the U.S. District Court for the Central District of California Southern Division Santa Ana denied plaintiffs’ motion to enjoin Valeant and Pershing Square from voting its shares and proxies at the Allergan shareholder meeting. Professor Daines was supported by a Compass Lexecon team including David Gross, Jonathan Polonsky and David Strahlberg. We worked closely with counsel from Kirkland & Ellis LLP, representing Pershing Square, including John Del Monaco and Michael Shipley, and from Sullivan & Cromwell LLP, representing Valeant, including Brian Frawley and Edward Johnson.

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