Allergan, Ackman Agree Special Meeting Won't Trigger Poison Pill, Reuters Reports

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IRVINE, Calif.—Reuters reported Pershing Square Capital Management, led by activist investor William Ackman, and Allergan Inc. have agreed that calling a special meeting in an effort to elect new board members will not trigger Allergan's so-called "poison pill" measure, settling a lawsuit, the companies said on Friday.

Pershing Square and Valeant Pharmaceuticals International Inc. are pursuing Allergan in a $53 billion hostile takeover bid. Pershing Square has nearly a 10 percent stake in Allergan and if its stake passes 10 percent, Allergan's shareholder rights plan goes into effect and dilutes existing shareholders.

Pershing Square said in a statement that the agreement will allow it to begin soliciting proxies "soon." Valeant issued a statement saying that it was pleased the litigation was resolved and would be "moving forward with our exchange offer."

Pershing Square had filed suit in Delaware earlier this month seeking confirmation that soliciting proxies to call a meeting and replace board members would not trigger the pill. Allergan requires 25 percent of shareholders to call a special meeting.