Breakingviews

Ackman inadvertently makes case for index funds

January 28, 2016

The Pershing Square boss rails against passive portfolio managers in his latest missive. Bill Ackman also blames his own woeful 2015 performance on bad market timing and hedges that didn’t work. That encapsulates why most investors should stick to the likes of the S&P 500.

Contortions make rail deal tough sell for Ackman

December 8, 2015

A revised offer from Canadian Pacific for Norfolk Southern, together worth nearly $50 bln, included an interim trust, less cash and finger-in-the-air merger math. The activist contributed 23 pages of slides. NS was too quick to rebuff it. Investors, though, may just be confused.

Bill Ackman pushes limits of activism at Valeant

November 5, 2015

The hedge fund boss hinted the drugmaker’s CEO may need to go and was invited into the boardroom mid-crisis, according to a newspaper report. Ackman also seems to have usurped Valeant’s defense. The $55 bln of quickly lost market value suggests his involvement isn’t helping much.

Ackman’s Valeant defense nervy but unpersuasive

October 30, 2015

The hedge fund founder says the drug firm is a victim of bad PR, naive investors and jealous rivals. He even likened his stake to Warren Buffett’s savvy investment in lenders cheated by a 1960s salad-oil scandal. The reality is Valeant is flawed in ways a “pep talk” won’t fix.

Valeant sets tone for post-M&A accounting scrutiny

October 22, 2015

The drugmaker’s stock ended Wednesday down 19 pct after a short-seller and others questioned its bookkeeping. The $40 bln serial acquirer’s history may make it an obvious target, but as growth and mergers slow a renewed investor focus on companies’ figures is a logical shift.

Valeant’s platform trembles beneath Ackman’s feet

October 19, 2015

The hedge fund manager bought a 5.5 pct stake because Valeant offered a cure for poor capital allocation by drugmakers. Now it’s scaling back on acquisitions, raising R&D and limiting price increases. The outsiders missed the political benefits to pharma’s spending.

Valeant urges $54 bln deal with carrot, two sticks

June 2, 2014

The acquisitive pharma group raised its offer for Allergan again, if the Allergan board cooperates. Meanwhile hedgie Bill Ackman is threatening to unseat six directors – and Valeant could yet decide to go fully hostile. But questions over Valeant’s own stock remain its weakness.

Valeant’s sweetener comes off a little defensive

May 28, 2014

Upping its bid for Allergan to $49 bln disappointed investors on both sides. Using a messy financial instrument probably didn’t help, especially after the target rejected the deal math and compared its suitor to Tyco. Valeant needs to do more to reclaim the aggressor’s role.

Valeant can boost its $47 bln bid for Allergan

April 22, 2014

The pharma M&A machine, working with hedgie Bill Ackman, thinks it can cut $2.7 bln of costs from the Botox maker. At Valeant’s single-digit tax rate, that’s worth nearly $25 bln. And that’s just the start of potential benefits. The deal would add up with a much bigger premium.

Dawn raid makes comeback via activist drone strike

April 22, 2014

Agitators usually take a stake in a company and then try to make something happen. Bill Ackman has instead teamed up with Valeant Pharmaceuticals to grab a 9.7 pct interest in $40 bln-plus Allergan, with a hostile takeover ready for deployment. It’s a potent battlefield tactic.