By Rod Nickel
(Reuters) - Allergan Inc <AGN.N>, trying to fend off a hostile takeover bid from Valeant Pharmaceuticals International Inc <VRX.TO>, has thrown up obstacles to a special shareholders meeting, its biggest investor said on Thursday.
Pershing Square Capital Management, which is led by Bill Ackman, is attempting to muster at least 25 percent support of Allergan shares to hold a special meeting that could replace most of the Botox anti-wrinkle injection maker's board, which has refused to negotiate with Valeant.
In a webcast for investors, Ackman said Allergan's rules for special meetings were designed to stop them from occurring.
The company limits special meetings to a small window during a given year and requires a high percentage of stockholders to call one, Ackman said. Shareholders must hold their stock through the date of the special meeting for them to count, he added.
The rules are "the most onerous special meeting provisions of any public company in the United States," Ackman said.
Laval, Quebec-based Valeant made an unsolicited cash-and-stock bid in April for Allergan and has since raised its offer, which is currently worth about $51 billion. Allergan has rejected the offer.
An Allergan spokesperson dismissed criticism by Pershing, which supports the takeover bid.
"Today’s presentation by Mr. Ackman is more of the same – baseless accusations and mischaracterizations designed to distract stockholders so Valeant can acquire Allergan at the lowest possible price."
Allergan is "stockholder-friendly" and focused on delivering value to investors, the spokesperson said.
Ackman said Pershing hoped to gather enough shareholder support by mid-August to call a special meeting, but probably needed as much as 40 percent for a "big cushion" to offset possible stock sales before the meeting occurs. He said the hedge fund met on Wednesday with shareholder advisory firm Institutional Shareholder Services, which could make a recommendation on Valeant's offer in early August.
Ackman estimated that a merged Valeant and Allergan would trade at $223 per share, slightly higher than the view of fellow activist investor John Paulson, who estimated $222 on Wednesday.
Allergan shares were up 0.7 percent at $166.92 in afternoon trading in New York, while Valeant had tacked on nearly 4 percent at C$131.31 in Toronto.
Valeant officials did not respond to a request for comment.
Ackman used much of the nearly three-hour webcast to criticize Allergan's corporate governance and its business, including the approaching expiry of patents on some products and the return on its research and development spending.
He also said the longer Allergan delays negotiating with Valeant, the greater the risk that a potential deal will fall apart due to a sudden change in equity or debt markets.
"I would say the financing markets cannot get better than where they are," Ackman said. "You can't ask for a better market than this, but that can change overnight."
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Lisa Von Ahn and Andre Grenon)