Allergan sues rival drugmaker Valeant and partner, alleging fraud in hostile takeover attempt

Botox maker Allergan is suing a Canadian drugmaker and a hedge fund over their hostile takeover attempt, alleging insider trading and other fraud before their plan became public.

Allergan's lawsuit names as plaintiffs drugmaker Valeant Pharmaceuticals International, hedge fund Pershing Square Capital Management and its principal, William Ackerman.

The suit claims debt-laden Valeant, which has bought up more than 100 smaller drug companies in the last several years, lined up Pershing Square to finance the deal. The suit claims Pershing quietly bought $3.2 billion worth of shares from unknowing Allergan stockholders between February and April. It reaped a windfall when Valeant publicly proposed buying Allergan. Allergan has rejected their last offer, for more than $53 billion.

Spokespeople for Valeant and Pershing did not respond to requests for comment.