Calls for a special meeting of Allergan (NYSE:AGN) shareholders to discuss a hostile takeover bid by rival drugmaker Valeant (NYSE:VRX) don't change the fact that the buyout offer is "grossly inadequate," Allergan said Wednesday.
The Irvine, California-based company's remarks came after two proxy advisory firms backed a campaign by New York investment and hedge fund firm Pershing Square Capital Management LP to persuade Allergan shareholders to call for a special shareholder meeting.
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Pershing Square, which is led by activist investor Bill Ackman, is Allergan's largest shareholder and has teamed up with Canada-based Valeant to try to buy Allergan. It also has been urging Allergan shareholders to call for a special meeting to consider removing six of the company's board members, among other matters.
Last week, Glass Lewis & Co. recommended that Allergan shareholders support Pershing Square's call for a special meeting of shareholders. On Wednesday, Institutional Shareholder Services also endorsed the move.
Allergan responded, but stopped short of advising shareholders against calling for a special meeting. Instead, it emphasized that the proxy firms merely backed the right of shareholders to request a special meeting, not the proposed Valeant takeover bid.
"These recommendations do not change the fact that Valeant's offer is grossly inadequate, substantially undervalues Allergan, creates significant risks and uncertainties for Allergan stockholders and is not in the best interests of the company and its stockholders," Allergan said in a statement.
Valeant and Pershing Square went public with their takeover attempt in April and have increased their offer several times.
Allergan, which makes Botox and the dry eye drug Restasis, has rejected multiple unsolicited offers from the two companies, the latest for more than $53 billion.
Shares in Allergan fell $1.78, or about 1.1 percent, to $156.77 in afternoon trading.
Valeant Pharmaceuticals International slipped 14 cents to $110.53.