WASHINGTON (dpa-AFX) - Mutual fund T. Rowe Price Inc (TROW), is pushing Allergan Inc (AGN) to seek vote from shareholders on acquisitions, and expressed concern over the board's corporate governance practices. T. Rowe is Allergan's second-largest shareholder with a 5.4 percent stake.
T. Rowe's exhortation comes as Allergan strives to fend off a $57 billion hostile bid from Valeant Pharmaceuticals (VRX, VRX.TO), and in the process was reported to be in merger talks with Salix Pharmaceuticals.
Allergan has scheduled a special meeting of shareholders on December 18, under pressure from William Ackman, its largest shareholder and who strongly supports Valeant's offer. The special meeting is expected to result in a re-jig of the Allergan board and thereby smoothen the process for the Valeant bid.
In a statement, T. Rowe said it believes the December 18 meeting of Allergan shareholders is of such importance that it behooves the company to refrain from any major, irreversible commitments, unless it has the backing of shareholders. T. Rowe also holds a 5 percent stake in Valeant.
In April, Valeant in support with William Ackman made a futile $46 billion bid to buy Allergan. Ackman's Pershing Square Capital holds a 9.7 percent stake in Allergan. Valeant later sweetened its bid for Allergan to about $53 billion, but the offer was again spurned.
Allergan was reported to be in talks to buy Salix Pharmaceuticals Ltd (SLXP) for over $10 billion, in a bid to make it costly for Valeant to buy Allergan.
Ackman has threatened to sue Allergan if it agrees to a merger deal with Salix that does not require shareholder approval.
But the equation appears to get more complex as another company, Actavis plc (ACT), reportedly made an offer to acquire Allergan. Terms of the deal were not known, but Allergan is said to have rejected the offer and was focusing its efforts on Salix.
Allergan stock closed Friday at $178.00, up $3.12 or 1.78%, on a volume of 2.2 million shares on the NYSE. In after hours, the stock dropped $2.70 or 1.52% at $175.30.
T. Rowe closed at $79.20, up $0.48 or 0.61%, on a volume of 1 million shares on the Nasdaq. In after hours, the stock dropped $0.22 or 0.28% at $78.98.
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