Lawsuit Over Takeover Battle Settled By Pershing And Allergan, Inc. (NYSE:AGN)

Allergan, Inc. (NYSE:AGN) has ended it’s legal suit against celebrity hedge fund activist Bill Ackman and his company, Pershing Square Capital. Apparently, the warring firms have finally decided to ‘bury the hatchet’ and have arrived at a settlement before the California Federal Court, on Thursday.

Allergan, Inc. had earlier sued Pershing Square Capital, as well as another Canada-based drug maker, Valeant, for colluding, by way of insider-trading, to take over the company. Allergan Inc, had fortuitously found another interested buyer in Actavis in November and finally closed the deal for $70.5 billion deal on March 17, 2015.

Apparently, at the root of much distrust at Allergan, Inc. (NYSE:AGN), was the former Chief Executive Officer, David Pyott. He is accused of moving away from Allergan once the deal with Actavis was finally closed. Pyott allegedly deployed the legal suit as part of an elaborate play to remain in control. However, with the closure of the deal with Actavis, the talks between Allergan, Inc. and the defendants was easy and eventually resulted in the dismissal of the suit.

It is believed that Allergan, Inc. (NYSE:AGN) volunteered to withdraw the suit against Ackman, as well as his company, besides Valeant as well. In cooperation, the latter too dropped their claims, that Allergan and its Board of Directors were staking false claims. This resulted in facilitating a settlement by the court. Separately, another claim, by an executive of Allergan Inc, who was held stocks in the company also, chose to dismiss her claims. Despite the legal wrangles between the companies, hedge fund Pershing Square has raked in profits to the tune of $2 billion. The gains are in cash and stock, following Actavis’ pursuit of Allergan and eventual purchase of the company. Actavis’ aggressive acquisition of Allergan was driven by the market share that Allergan has for its coveted drug, Botox.

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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