Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

This public program was initiated in collaboration with The Conference Board Task Force on Corporate/Investor Engagement and with Thomson Reuters support of communication technologies. The Forum is providing continuing reports of the issues that concern this program's participants, as summarized  in the January 5, 2015 Forum Report of Conclusions.

"Fair Access" Home Page

"Fair Access" Program Reference


Related Projects 2012-2019

For graphed analyses of company and related industry returns, see

Returns on Corporate Capital

See also analyses of

Shareholder Support Rankings


Forum distribution:

Questions about biases of independent experts


Source: New York Times DealBook, June 12, 2014 article and video

Investment Banking | Mergers & Acquisitions

Goldman’s Unusually Quiet Role in Battle for Botox Maker

By DAVID GELLES    June 12, 2014 11:34 am

Damian Dovarganes/Associated Press

Allergan is the maker of Botox.

Goldman Sachs is known for successfully defending its clients against hostile takeover attempts. So it was little surprise when Allergan, the maker of Botox, hired Goldman to fend off an unsolicited $53 billion acquisition by Valeant Pharmaceuticals.

But as the takeover battle heats up, Goldman is curiously taking a back seat to other consultants in the effort to publicly defend Allergan. When Allergan made a presentation questioning the value of Valeant stock last month, it was Alvarez & Marsal and FTI Consulting – not Goldman – that performed the analysis.

The hiring of firms like Alvarez & Marsal and FTI Consulting is unusual in such a big, hostile deal. It is typically investment bankers, not outside consultants, that do this work. Allergan said it hired Alvarez & Marsal and FTI Consulting because they had expertise in forensic accounting.

But there may be another reason it is more fitting for those firms, and not Goldman, to be waging an attack on the value of Valeant’s stock: Goldman was the sole underwriter for a $2.3 billion offering of new Valeant shares less than a year ago.

Valeant issued new stock last June, selling 23.5 million shares at $85 apiece as part of its effort to fund the purchase of Bausch & Lomb. As underwriter, Goldman placed those shares with institutional investors, essentially giving the stock its blessing. What is more, Goldman itself exercised its option to purchase Valeant shares, buying $300 million worth for itself.

Now, despite its recent endorsement of Valeant’s stock, Goldman’s new client, Allergan, is proceeding with an effort to question the worth of those shares.

“Valeant needs to complete [the] Allergan transaction or another significant transaction to support its current stock price,” Allergan said in a presentation filed with the Securities and Exchange Commission on Tuesday.

That same day, Allergan’s chief executive, David E.I. Pyott, called into question the value of Valeant shares. “It’s easy to count U.S. dollars,” he said. “The rest is much more difficult to value.” And Goldman’s name has not been mentioned in Allergan’s recent investor presentations, which make the case against Valeant’s stock.

Since Goldman underwrote Valeant’s stock, the shares have traded up about 50 percent. Goldman may have comfortably recommended buying Valeant shares at $85, but there’s no guarantee it would offer them to institutional investors at $123, Valeant’s current price. Goldman declined to comment.

And of course, investment banks have multiple lines of business, and occasionally work for clients with divergent interests. Different teams at Goldman handled the Valeant underwriting and the Allergan defense.

Nonetheless, Goldman’s enthusiastic support of Valeant’s stock less than a year ago stands in contrast to its alliance with a team that is now talking down the value of those same shares.

Goldman has other ties to Valeant as well. It also advised Bausch & Lomb on its sale to Valeant, then provided Valeant with committed financing to complete the deal. And Howard B. Schiller, Valeant’s chief financial officer, was at Goldman for 24 years, rising to chief operating officer of the investment bank.

Allergan has other advisers working on its defense against Valeant. Bank of America Merrill Lynch is working alongside Goldman, and the law firms Latham & Watkins, Richards, Layton & Finger, and Wachtell, Lipton, Rosen & Katz are providing legal advice.

Valeant, meanwhile, has recently hired Morgan Stanley to assist in its hostile approach, according to people briefed on the matter. Morgan Stanley joins Barclays and RBC Capital Markets as financial advisers to Valeant, while Sullivan & Cromwell, Skadden, Arps, Slate, Meagher & Flom, and Osler, Hoskin & Harcourt are providing legal advice.

June 9th, 2014

William A. Ackman answers why he thinks Valeant’s potential takeover of Allergan is beneficial, and the “unprecedented” terms behind the hostile bid.

Morgan Stanley was brought on because Valeant and the hedge fund manager William A. Ackman, who is working with Valeant on the bid, believed until recently that Allergan might be willing to negotiate a friendly transaction. But with Allergan’s formal rejection of Valeant’s offer this week, it became clear that the effort was headed for a special meeting, where Valeant will seek to replace the Allergan board.

Morgan Stanley has advised on numerous hostile approaches, and has joined the fray late in the game before. When Sanofi-Aventis was making a hostile bid for Genzyme in 2010, which it eventually won, Morgan Stanley was brought on well into the process.

It will probably be months more before a special meeting of Allergan shareholders is called. In the meantime, Valeant, advised by Morgan Stanley and others, will keep waging its hostile takeover effort in one of the most intriguing deals of the year. And Allergan, advised by Goldman’s expert defense teams, will continue questioning the value of Valeant’s stock.


Copyright 2014 The New York Times Company



This Forum program was 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 purpose of this public Forum's program was 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 was 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 in 2012 in collaboration with The Conference Board and with Thomson Reuters support of communication technologies to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices. The website is being maintained to provide continuing reports of the issues addressed in the program, as summarized in the January 5, 2015 Forum Report of Conclusions.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

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.