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Pershing proposes shuffling Allergan board

Allergan did not immediately comment

Pershing Square Capital Management, Allergan Inc.'s biggest investor, is calling for a special shareholder meeting to remove most of the drugmaker's board in an effort to push forward a proposed acquisition by Valeant Pharmaceuticals International Inc.

A deal could be signed within a week if Allergan's board decides to negotiate, Pershing Square's Chief Executive Officer Bill Ackman said Monday. Under the latest offer, Allergan shareholders would get $72 a share in cash, up from $58.30 proposed May 28 when Valeant first raised the bid, along with 0.83 of a Valeant share, the Laval, Quebec-based company said in a May 30 statement.

Ackman's hedge fund, which has a 9.7 percent stake in Botox-maker Allergan, filed a preliminary proxy with the Securities and Exchange Commission today to start the process for the shareholder meeting, and Valeant is taking steps to launch an exchange offer. The company has raised its bid twice for Irvine, California-based Allergan. The cash-and-stock portion of the bid now stands at about $54.2 billion.

If Allergan's management and board of directors choose not to sit down to negotiate the deal, "a new board, appointed by shareholders, will negotiate a transaction," Ackman said.

Pershing plans to solicit for the special meeting starting June 30, expecting shareholders to consider the proxy for the meeting as early as August 7. Allergan would be able to delay the meeting until November.

Pershing would continue to forgo the cash portion of the offer, sweetening the incentive for other shareholders to accelerate closing the deal, Ackman said. He met on May 29 with six out of 10 of Allergan's largest shareholders, who "expressed disappointment about how Allergan has managed the transaction and the proposal," Ackman said.

"We believe that speed in concluding a transaction is in the best interest of both shareholders," said Michael Pearson, Valeant chief executive officer, on the call. "We will be patient, we will get this deal done."

Allergan did not immediately comment.

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