Allergan, Inc. (NYSE:AGN) has filed a case to sue Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Bill Ackman‘s fund, Pershing Square, in federal court in the district of California accusing Valeant Pharmaceuticals Intl Inc (NYSE:VRX) of an insider trading scheme involving Pershing Square. In a report on Bloomberg’s Market Makers, Scarlet Fu reported on this development, adding that allegations of fraudulent practices and the failure to disclose legally required information was also leveled against Valeant Pharmaceuticals Intl Inc (NYSE:VRX) by Allergan, Inc. (NYSE:AGN). This has led to a slight decrease in stock prices for both companies.
Allergan’s accusations refer to the fact that from February through April, Pershing Square was loading on Allergan, Inc. (NYSE:AGN) shares, knowing that Valeant plans to offer a bid to take over the company. Earlier this year, Pershing Square and Valeant indeed planned to acquire Allergan, but their bid was rejected.
Fu added that the lawsuit was filed by Allergan, Inc. (NYSE:AGN) as a claim to “ensure that all its stockholders have the opportunity to make decisions regarding their investment in the company based on compliant, full, and fair disclosure.”
Discussing the recent developments at Allergan, Inc. (NYSE:AGN), which have included job cuts, Fu agreed that it was expected that the company would take some action to prove that it could survive on its own, given the tight hold Allergan, Inc. (NYSE:AGN) has been in, hemmed in by Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Allergan‘s move was seen as a defensive move, one that is aimed at pushing back the shareholder vote as far back as possible, which a court case will certainly achieve.
“This is a defensive move, certainly, but it is one that is pushing the stock lower this morning and […], it is something that we did expect, that they would do what it can to fend off Valeant and Pershing Square,” Fu said.