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 along with 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 stockholder.
The case presents pupils with several of the selections 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 also a special shareholder meeting to vote on replacing the directors using a slate of Allergan favorable to the Valeant merger. The projected Salix acquisition would give a new marketplace that is curative to Allergan but would also make Allergan too big for Valeant to obtain.
PUBLICATION DATE: January 04, 2016 PRODUCT #: W15612-PDF-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
Related Case Solutions & Analyses:
ITC e-Choupal: Corporate Social Responsibility in Rural India
Kit Hindrichs at Pentagram (B)
WPP–Integrating Icons to Leverage Knowledge
Managing Online Reviews on TripAdvisor, Portuguese Version
GlaxoSmithKline in China (C)
GlaxoSmithKline in China (A)
Dr. Tim’s Premium All Natural Pet Food: Growth Options and Web Analytics Insights
TruEarth Healthy Foods
Recommendation Essay
Chocolates El Rey, Spanish Version
