Pershing Square Sells Valeant Stake


CBJ — American billionaire investor Bill Ackman has walked away from Valeant Pharmaceuticals nursing a $3 billion loss after he sold his entire stake in the ailing drug company despite trying to rescue it for some 18 months.

Ackman’s Pershing Square Capital Management disclosed the exit in a press release after markets closed. The New York-based fund said its position accounted for up to 3% of Pershing’s funds, but the company “required a disproportionately large amount of time and resources.”

Pershing also announced Ackman and Vice-Chair Steve Fraidin would step down from Valeant’s board of directors after its annual general meeting.

Valeant’s New York-listed stock was down 10% in after-hours trading.

Pershing Square became one of the firm’s biggest investors in 2015 when it sunk some $3.2 billion into the company. Ackman bought into Valeant when the stock was trading near $190 a share and he watched it surge to $260 a share during the summer of 2015.

But governmental scrutiny of the company’s pricing policies coupled with scandals surrounding Valeant’s specialty pharmacy unit, Philidor, caused the stock price to sharply tumble after August 2015.

Now Ackman walks away with about $221 million, having sold his entire stake of 18.1 million shares after months of turmoil that have left his fund with two years of double-digit losses and a tarnished reputation.

During his one year on the board, Ackman replaced Valeant’s CEO, refreshed the board with 10 new directors and worked to pay down some $2.7 billion in debt through the sale of non-core assets. Still, the company’s stock price kept sinking despite hopes that a merger deal might be around the corner.

It’s the second high-profile exit by Pershing in the last year. Last August it announced it sold its shares in Canadian Pacific Railway after engineering a proxy campaign and turnaround at the railroad company.


merger and acquisition