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Orange County Man Not Thrilled With Bill Ackman’s Allergan Referendum

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Allergan, which Bill Ackman would very much like to see become a subsidiary of Valeant Pharmaceutricals, is based in Irvine, Calif. Ed Royce is a congressman who represents a swath of Orange County to Irvine’s north, and who presumably counts a few Allergan employees as constituents, and who will be spending some of Allergan’s money in an effort to be reelected in November.

This same Ed Royce does not think much of Bill Ackman’s plan to take it to the people and ask Allergan shareholders whether they’d like to take the now $49.9 billion Valeant would like to give them for their company, and he’s not afraid to tell Mary Jo White all about it.

In a letter dated Tuesday, Rep. Edward Royce (R., Calif.) expressed concerns about the referendum to SEC Chairman Mary Jo White, saying the "strategy being used in this case could make it difficult for shareholders to truly understand what is occurring."

Mr. Royce's district includes areas just north of Irvine, Calif., where Allergan is based. A political-action committee, or PAC, associated with Allergan gave $5,000 to Mr. Royce's 2014 campaign, according to Open Secrets, which tracks political donations.

"This is the first shadow shareholder referendum of its kind filed at the SEC, and it's at the expense of shareholder transparency," Mr. Royce said in a statement Wednesday. "My immediate concern is that the SEC performs a thorough review of the details of this filing with that transparency in mind. Allergan's investors and the U.S. capital markets deserve nothing less."

Some of Ed Royce’s colleagues also have something to say: If all of the trash Allergan’s been talking about Valeant, viz. business strategies that involve raising prices and nothing else, is true, it means that the cost of eliminating facial creases will increase for their constituents.

In a letter Tuesday to the Federal Trade Commission, the group — three Democrats and five Republicans — said the deal, which would grow Valeant's market share for certain skin- and eye-care products, including wrinkle-reducer Botox, could lead to price increases.

"The consolidation of market share in Valeant may allow it to drive up prices for consumers and patients while limiting product options," the letter said.

Lawmaker Raises Concerns to SEC About Ackman’s Allergan Referendum [WSJ]
Threatening a Proxy Battle, Valeant Raises Its Offer on the Botox Maker Allergan [DealBook]