Pershing Square Capital Management LP owes its ability to amass an undetected stake of almost 10 percent in Allergan Inc. to a regulation it lobbied to preserve three years ago.
Pershing Square, the hedge-fund firm led by Bill Ackman, recruited a group of large investors in 2011 that persuaded the Securities and Exchange Commission to reconsider reducing a 10-day window that investors have to disclose stakes of five percent or more in a company. The SEC had successfully pushed for authority to shorten the reporting requirement in the 2010 Dodd-Frank Act....
Changing the rule could make it harder and more expensive for activist investors such as Pershing Square to quietly buy up shares in a public company. Ackman says that enables him to influence a company’s management for the benefit of all shareholders....
Pershing Square and Jana Partners asked other large investors such as BlackRock Inc., T. Rowe Price Inc. and TIAA-CREF to join them in meetings with regulators, said a person familiar with the matter who asked to not be named because the meetings were private. The other institutions, some of which invest through hedge funds, asked the SEC what the case was for changing the rule, said Stephen L. Brown, who was then a senior director at TIAA-CREF.
And it’s working.
Allergan Inc. has contacted companies including Sanofi and Johnson & Johnson to see if either would be interested in acquiring the Botox maker, said people with knowledge of the matter, as it explores its options after receiving an unsolicited $45.7 billion bid from Valeant Pharmaceuticals International Inc.
Ackman Fought to Keep SEC Rule That Enabled Allergan Deal [Bloomberg]
Allergan Exploring Sale to Sanofi, J&J [Bloomberg]