Ackman Amassed Allergan Stake Under Botox-Maker’s Radar

Bill Ackman’s Pershing Square Capital Management LP amassed almost 10 percent of Allergan Inc. in less than two months without raising many eyebrows at the Botox-maker he’s now targeting in a hostile takeover bid.

Ackman’s activist hedge fund, which has partnered with serial acquirer Valeant Pharmaceuticals International Inc. (VRX) to offer to buy Allergan and reap cost savings from combining the rival companies’ skin- and eye-care businesses, began buying Allergan stock Feb. 25 and then in March switched to over-the-counter call options to accumulate his stake, regulatory filings show. A buying pause April 9 and 10 helped lower the share price, before Ackman resumed in earnest April 11, according to two people familiar with the matter.

Valeant was interested in the unusual arrangement with Ackman because the hedge fund could amass more of Allergan’s shares before making a public disclosure, said a person familiar with the matter. The shares rallied the most since 2009 in the six days before the stake and bid were disclosed yesterday, soaring 22 percent, and trading volume last week approached the highest level in a year.

U.S. securities law “allows a company like Pershing to get a running start as there is not disclosure of the intent to take over a firm” until 10 days after acquiring more than 5 percent of the target’s shares, said James Cox, a professor at Duke University School of Law.

Fran McGill, a spokesman for Pershing Square at Rubenstein Associates, declined to comment, as did Bonnie Jacobs, a spokeswoman for Allergan.

“We firmly believe that combining Valeant and Allergan would create an unrivaled platform for growth and value creation in health care, and we look forward to finalizing and announcing the terms of our proposal shortly,” Valeant said in an e-mail.

Voracious Acquirer

Ackman is partnering with a voracious acquirer in Valeant Chief Executive Officer Mike Pearson, who took the helm at the Laval, Quebec-based company in 2008 and has since spent at least $19 billion buying more than 35 companies.

Rather than spend what Pearson says can be billions of dollars developing drugs from scratch, he buys companies with existing products, such as Bausch & Lomb for $8.7 billion last year, his biggest acquisition to date. That spending spree has left Valeant with debt of about $17 billion, according to data compiled by Bloomberg -- another reason a partnership on a deal this big makes sense.

“These guys are all finding out that they have to do different approaches because sometimes all that public information doesn’t help their cause, they wind up paying more for a company,” said Carlo Panaccione, co-founder of Navigation Group in Redwood Shores, California, who oversees around $375 million. Alliances like this may help deals “without having to necessarily show your hand too early.”

Larger Deal

Almost 24 million Allergan shares changed hands last week, the most since June, according to data compiled by Bloomberg. The stock is up 28 percent this year, the ninth-best performer in the Standard & Poor’s 500 Index. Ackman spent about $76 million on Allergan shares in late February, according to a regulatory filing. He then bought about $3 billion in over-the-counter calls on the stock in March and April.

Pearson reiterated in a Bloomberg interview last month that he could do a deal in 2014 comparable to Bausch & Lomb, after telegraphing his intention to do a larger deal at a Goldman Sachs Group Inc. conference in January.

Last year, Valeant tried unsuccessfully to acquire Actavis Plc, Bloomberg reported. In February, Actavis agreed to buy Forest Laboratories Inc. in a $25 billion deal, as other pharmaceutical companies race to gain scale and add products by acquiring rivals.

Valeant itself was earlier successfully targeted by activist investment fund ValueAct Holdings LP, and the firm’s president Mason Morfit remains on the company’s board.

Higher Returns

Valeant was pursuing long-shot disease cures when ValueAct invested in 2007. Morfit helped convince the board to turn to less sexy, higher-return branded generics and recruit Pearson as its CEO, with overhauled compensation practices that reward shareholder outperformance. Valeant has since grown into a $42 billion drugmaker from a $1.4 billion company.

Pearson also bought two companies last year that sold themselves amid pressure from another activist investor. Voce Capital Management LLC, a San Francisco investment fund, sent letters to management of both Obaji Medical Products Inc. and Solta Medical Inc. urging them to seek buyers. Valeant snapped up Obaji in March 2013 for $376 million and Solta in December for $263 million.

To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.net;David Welch in New York at dwelch12@bloomberg.net

To contact the editors responsible for this story: Jeffrey McCracken atjmccracken3@bloomberg.net Elizabeth Wollman, Ben Livesey

Source:

www.bloomberg.com

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Funding for startups soar 57%, highest since 2001

NEW YORK (AP) — Funding for U.S. startup companies jumped 57% in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

Startup investments totaled $9.47 billion in the first three months of the year, up from $6.01 billion in the first quarter of 2013. It was the highest since the second quarter of 2001, when investments reached $11.5 billion.

There were 951 deals completed in the quarter, up from 916 in the same period a year ago.

Software companies received the most money — $4 billion. Biotech was a distant second with $1.06 billion. The last time the software sector received this much money was in the fourth quarter of 2000, right as the dot-com bubble was about to burst.

The sharp increase in venture funding in the first three months of the year comes amid a cooling of investor sentiment toward publicly traded technology stocks.

Since March, shares of companies such as Netflix, Twitter and Facebook have sagged. With some technology stocks down as much as 40%, as in Twitter's case, the sharp decline is raising questions about whether the downturn is temporary or a sign that another bubble is about to pop.

That said, one reason for the high level of funding activity may be that VCs are investing in maturing companies. Later-stage deals are bigger than early-stage investments because they help startups expand rather than get off the ground.

Online storage startup Dropbox snagged the quarter's top deal with $325 million. It was the San Francisco company's fourth round of financing. Vacation rentals site Airbnb and mobile messaging service TangoMe tied for the No. 2 spot with $200 million each. For Airbnb, it was the seventh round of financing, while it was TangoMe's fourth.

The MoneyTree study was conducted by Pricewater house Coopers and the National Venture Capital Association, based on data from Thomson Reuters.

Source:

www.usatoday.com

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Dollar slips on Yellen's dovish stance, pound hits four-and-a-half year high

(Reuters) - The U.S. dollar slipped against a basket of currencies on Thursday after Federal Reserve Chair Janet Yellen said low interest rates are needed to support the U.S. economy even though such a policy stand hurts its currency.

Dollar weakness helped propel sterling to its highest against the U.S. currency since late 2009 as investors continued to price in expectations for a Bank of England rate hike in the first quarter of 2015 after strong jobs and wages data on Wednesday.

The greenback also lost ground against the euro and the yen on dwindling trading volume in advance of the Easter holiday. It trimmed earlier losses against those currencies after a stronger-than-expected reading from the Philadelphia Federal Reserve on business activity in the U.S. Mid-Atlantic region.

Sterling's trade-weighted index hit a 5-1/2-year high in the European session, up 1.8 percent on the year before easing in early U.S. trading. <GBP/>

In her second public speech as the head of the U.S. central bank on Wednesday, Yellen stressed the need for accommodative policy, citing the current anemic pace of price growth as more of an economic threat than the risk of rising long-term inflation.

Her dovish remarks overshadowed data suggesting that the U.S. economy was regaining momentum. Thursday's data showed domestic jobless claims held near pre-recession levels. They followed Wednesday's data that indicated U.S. factory output rose solidly in March and the Fed's Beige Book report showed economic activity picked up in recent weeks.

This latest evidence, however, was not robust enough to override Yellen's rhetoric on low interest rates, analysts said.

"The data are not strong enough to push back the dovish stand," said Sebastien Galy, currency strategist at Societe Generale in New York.

The dollar index .DXY dipped 0.1 percent to 79.700 after hitting a session low of 79.581. The greenback dipped 0.1 percent versus the euro at $1.3821 and was little changed against the yen at 102.22 yen.

Sterling was up 0.1 percent at $1.6806, after hitting its highest since late 2009 at $1.6842.

Meanwhile, the Russian rouble improved for a second day against the dollar as violence intensified in East Ukraine even though Ukrainian, Russian and Western diplomats sought to resolve the crisis.

The rouble last traded up 0.9 percent versus the greenback at 35.72 roubles.

THIN LIQUIDITY

Volumes are expected to fade in advance of the Easter holiday. London, which has the biggest share of daily global currency trading, will be shut on Friday and Monday, while U.S. financial markets will be closed on Friday. Markets in Tokyo will be open.

Nevertheless, according to data from Reuters Matching, trading in dollar/yen was well above its one-month average.

Some investors apparently used comments by Bank of Japan Governor Haruhiko Kuroda as an excuse to buy back yen, even though his remarks contained nothing new, Ayako Sera, senior market economist at Sumitomo Mitsui Trust Bank, said.

The central bank chief said the BoJ would adjust monetary policy when needed but said nothing to indicate that more easing steps would be forthcoming any time soon.

"There is potential for another leg lower in the correction witnessed since the beginning of the year, in our view. We look to sell rebounds towards the 102.50 yen area, with a move below 101.50 yen triggering a renewed bearish signal for dollar/yen," Morgan Stanley analysts said in a note.

The euro, though, edged 0.1 percent higher against the yen to 141.42 yen and held firm against the dollar with some of its gains linked to demand for an Italian bond from overseas investors, traders said.

Source:

www.reuters.com

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Bay State home sales soar to highest January level since 2007

Single-family home sales in Massachusetts increased by 5 percent in January — the highest number recorded for the month in six years, according to a new report from The Warren Group.

The surge comes on the heels of two months of modest decreases in sales volume. January home sales in the Bay State increased to 2,728, up from 2,599 in 2013. The last time sales volume was bigger in January was in January 2007, when 2,953 houses were sold.

“As more fresh inventory came on late last fall, the homes were gobbled up and sales surged,” Gary Rogers, a regional vice president of the National Association of Realtors, told the Business Journal. “I’m also seeing more cash buyers than ever before. About a third of the sales are cash compared to about 10 percent in the past.”

As sales soared, so did prices. The median price for a single-family home in Massachusetts in January increased to $315,000, up 12.5 percent from $280,000 one year ago. This is the seventh time in the past year that the median price has grown by double digits, and is the highest median price for homes in January since 2008.

Condominium sales for the month also did well, rising to 1,144 in January from 981 in 2013, a 16.6-percent increase. This is the first January since 2008 where condo sales broke the 1,000 mark.

The median condo price in the Bay State increased by 24 percent to $300,000, the highest January median price for condos since The Warren Group began tracking median condo price data in 1987. In January 2013, the median price for a condo was $242,000.

News Source; www.bizjournals.com

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