Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

See related case examples of

Dell Inc.

appraisal rights for intrinsic value realization

and

Walgreen Co.

stock buyback policies

"Fair Access" Home Page

"Fair Access" Program Reference

For graphs of specific company and related industry returns, see

Returns on Corporate Capital

For graphs of specific company voting for the past 5 years, see

Shareholder Support Rankings

 

 

 

Forum distribution:

Another example of independent expertise provided to investors

 

For the Allergan press release referenced in the article below, see

 

Source: The Wall Street Journal MoneyBeat, June 16, 2014 article

THE WALL STREET JOURNAL   |

 MARKETS & FINANCE



10:53 am ET
Jun 16, 2014

Deals

Allergan Quotes Morgan Stanley to Attack Morgan Stanley Client Valeant

 

By David Benoit

― EPA

Investment bankers: Beware what you put in emails when you haven’t been hired.

In a release Monday, the Allergan Inc. once again went after the business model of its unsolicited suitor Valeant Pharmaceuticals Inc. Allergan has made no secret that it has concerns about Valeant’s strategy of buying companies instead of spending on research and development, as detailed last week by WSJ. Indeed, this has been the crux of Allergan’s arguments for rejecting the $53 billion cash and stock offer, saying its own shareholders don’t want Valeant stock.

Monday, Allergan quoted several others voicing similar concerns, including some short sellers. But the show stoppers are the quotes Allergan cites from Morgan Stanley 's Robert Kindler, the bank’s global head of M&A, and David Horn, a health-care banker.

According to Allergan’s release, Mr. Kindler wrote in an email to Allergan executives:

“My takeaway is that AGN is not being nearly aggressive enough in going after the VRX business model and currency.”

And wrote Mr. Horn:

““Part of what Rob [Kindler] is suggesting [to Allergan] is to allow him to use his significant relationships with media and analysts to provide a clear and detailed articulation of why Valeant is a house of cards and your investors should not want to take their stock.”

The twist? Morgan Stanley hadn’t landed a role advising Allergan, and instead was hired this month by Valeant, as reported by CNBC last week.

Those emails are the kind bankers send when they are looking to get hired by a client. And it’s hardly surprising that Morgan Stanley would push to get on one of the biggest deals of the year. Allergan likely got dozens of such pitches from other investment bankers telling them to go after Valeant’s business model, an argument Allergan was even making to shareholders earlier this year when some speculation of a deal was percolating  but before Valeant made its offer public.

Valeant, for its part, says its business model is more efficient and points to its dramatic stock growth. Tuesday morning, it will address shareholders with its fourth presentation since this fight started to “refute misleading assertions made by Allergan and others.”

Indeed, Morgan Stanley’s research arm actually has a buy rating on the stock.

Bankers regularly wind up pitching both sides in a deal, so there really isn’t much unusual about the exchange. There can be concerns about potential conflicts of interest in some instances. (Allergan is not raising such concerns about Morgan Stanley.)

For example: some large shareholders of diamond seller Zale Corp. recently tried to raise an issue when they saw in filings that company’s banker had pitched Zale’s eventual acquirer Signet Jewelers Ltd.

And last week, The New York Times covered the fact that Goldman Sachs, which Allergan did hire, has previously helped Valeant raise funds by selling stock.

What is highly unusual is a company releasing emails from named bankers to executives, especially when the company has declined to hire those bankers.

Valeant’s CEO Michael Pearson seemed amused by Allergan’s tactic, calling it “a sign of desperation” and defending Mr. Kindler.

“Kindler is one of the best M&A bankers out there,” Mr. Pearson said in a statement. “While we will have some fun with him later, he’s still very much on our team.”

Allergan did include an asterisk on the quotes: “Permission to use quotations was neither sought nor obtained.”

UPDATE: This post was updated with a comment from Valeant CEO.

 

Copyright ©2014 Dow Jones & Company, Inc.

 

 

This Forum program is open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to access@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.