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  • January 2016 (Revised January 2019)
  • Supplement
  • HBS Case Collection

The Allergan Board Under Fire (B)

By: Lynn S. Paine, Suraj Srinivasan, John C. Coates and David Lane
  • Format:Print
  • | Language:English
  • | Pages:4
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Abstract

In 2014, the Allergan Inc. board of directors received a surprise takeover offer from Valeant Pharmaceuticals in alliance with hedge fund activist Bill Ackman's Pershing Square Capital Management. In the unprecedented arrangement between an acquirer and a hedge fund activist, Pershing Square had quietly amassed a 9.7% stake in Allergan prior to the Valeant bid, making Pershing Square Allergan's largest shareholder. The case presents students with many of the decisions Allergan's directors faced amid challenges to Allergan's governance, management, and business model. In particular, the Allergan board must decide whether to pursue a $10 billion acquisition of Salix Pharmaceuticals while under threat of a proxy contest and a special shareholder meeting to vote on replacing Allergan's directors with a slate more favorable to the Valeant merger. The proposed Salix acquisition would give Allergan a new therapeutic market but would also make Allergan too big for Valeant to acquire.

Keywords

Allergan, Inc.; Valeant; Ackman; Pershing Square; Tender Offer; Activist Investors; Business Models; R&D; Board Of Directors; Securities Litigation; Acquisition Strategy; Takeover Defenses; Hedge Funds; Shareholder Rights; Proxy Contest; Shareholder Special Meetings; Legal Issues In Contested Takeovers; Corporate Governance; Investment Activism; Business and Stakeholder Relations; Business Model; Business and Shareholder Relations; Valuation; Pharmaceutical Industry

Citation

Paine, Lynn S., Suraj Srinivasan, John C. Coates, and David Lane. "The Allergan Board Under Fire (B)." Harvard Business School Supplement 316-029, January 2016. (Revised January 2019.)
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About The Authors

Lynn S. Paine

General Management
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Suraj Srinivasan

Accounting and Management
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Related Work

    • September 2017
    • Faculty Research

    The Allergan Board Under Fire (A) and (B)

    By: John C. Coates, Lynn S. Paine and Suraj Srinivasan
    • January 2016 (Revised January 2019)
    • Faculty Research

    The Allergan Board Under Fire (B)

    By: Lynn S. Paine, Suraj Srinivasan, John C. Coates and David Lane
Related Work
  • The Allergan Board Under Fire (A) and (B) By: John C. Coates, Lynn S. Paine and Suraj Srinivasan
  • The Allergan Board Under Fire (B) By: Lynn S. Paine, Suraj Srinivasan, John C. Coates and David Lane
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