Boston, MA 08/15/2014 (wallstreetpr) – Are head fund companies made a big money out of Allergan, Inc. (NYSE:AGN)’s potential bid to be sold or a takeover target company? If so, are the investors taken for a ride? If reports are to be believed, the regulator, Securities Exchange Commission or the SEC, seemed to have seized off the matter and is probing the alleged roles played by some of the hedge fund companies. There is every chance for the investors to believe that the hedge funds were in collusion course for their benefit.
Hedge Fund Role
The $22.8 billion hedge-fund company, Paulson & Co., which is being controlled by John Paulson, acquired 5.6 million Allergan shares that were worth about $948 million at the end of the second quarter, Bloomberg reported quoting a filing with the SEC. The purchase was done in view of the potential takeover target.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) was touted as a potential bidder along with Pershing Square Capital Management’s Bill Ackman for Allergan, Inc. (NYSE:AGN) takeover. Interestingly, Paulson & Co. had reduced its holding in Valeant by about 500K shares. Therefore, the needle of suspicion rises among the investors and the regulators.
Now that the SEC has come into the picture of probing the tactics adopted by various hedge funds companies in buying and selling the shares of both Allergan, Inc. (NYSE:AGN) and Valeant, Perishing Square had welcomed the review of its takeover bid since it did not do anything wrong. The hedge fund company had told Bloomberg that there was nothing illegal or improper or unethical in taking a toehold position ahead of any merger or takeover proposal.
Allergan Sues Valeant
Interestingly, Allergan, Inc. (NYSE:AGN) had not only refused to have discussions with Valeant on their hostile bid but had also taken them to court on August 1 alleging its collusion course with Bill Ackman’s Perishing Square to make a big money even before the bid’s disclosure made public using the insider knowledge on the looming offer.