Billionaire Bill Ackman, Valeant Want To Take Over Botox-Maker Allergan

Apr 21 2014, 4:29pm CDT | by

Plenty of billionaires have become personally familiar with Botox, the wrinkle-killing drug. Activist hedge fund investor Bill Ackman may soon have an even closer relationship — as an owner.

According to a Wall Street Journal report, Ackman’s Pershing Square Capital is “teaming up” with Valeant Pharmaceuticals to pursue a takeover of Botox-maker Allergan. It’s an unlikely combination of activist investor and corporate conglomerate — that’s sending shares of both public companies soaring.

Allergan, up 6% in trading during the day, rocketed 17% in after hours trading on the news. Valent is also up about 11% after hours. Allergan and Valent are similarly-sized, with about $42 billion in market capitalization.

According to the Journal report, Ackman has already built up nearly a 10% stake in Allergan, worth about $4 billion — making it his biggest investment ever. If so, he’s do so quickly and quietly. As of Allergan’s most recent proxy statement just a month ago, no entity associated with Ackman reported owning more than 5% of the company’s shares.

UPDATE: According to an SEC filing released shortly before 5pm on Monday afternoon, Pershing Square has accumulated 28.9 million shares of Allergan stock. At current share prices, that stake would be worth nearly $4.8 billion.

Montreal-based Valeant has pursued a roll up strategy in recent years, buying its way into the top of the pharmaceutical business. Last year it purchased Bausch & Lomb for $8.7 billion. Before that, it acquired Medicis for $2.6 billion. Valeant’s CEO Mike Pearson has said that it’s his goal to be among the world’s five biggest drugmakers within the next few years.

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