ValueAct is back on Valeant's (VRX) board.
The drug company, now partnered with hedge fund icon Bill Ackman in a hostile takeover campaign against Allergan (AGN), announced Thursday morning that Jeffrey Ubben, ValueAct's founder and CEO, will join its board on Oct. 1. Ubben is taking the seat vacated by ValueAct's president, Mason Morfit, earlier this year when he won an appointment to the board of Microsoft (MSFT).
ValueAct owns roughly 5.6% of Valeant's stock.
The Wall Street Journal reports:
Morfit's departure from the Valeant board came amid the turbulence of Valeant's launching of its unorthodox takeover bid for Allergan Inc. in partnership with activist William Ackman. But anyone who thought his stepping down was a sign that ValueAct was opposed to the move was apparently mistaken.
Mr. Ubben said in a statement Thursday that he supports Valeant's ongoing effort to buy Allergan, calling it a "perfect strategic fit." Mr. Ubben said ValueAct has not reduced its position in Valeant since Mr. Morfit left the board in May. Instead, he said, "we expect to increase our already substantial position" and called the stock "significantly undervalued on a standalone basis."
Today's announcement helped drive Valeant's share price higher. At $127.87, the shares have risen 3.1% in afternoon market action, continuing an upward climb that began last month when the stock fell to $109.
The rising value of Valeant's stock is a boon for more than investors. The drug maker has offered to pay Allergan shareholders $72 in cash and 0.83 shares of Valeant stock per Allergan share, so a higher share price also increases the value of the offer.
Allergan's CEO has questioned the value of Valeant's stock.
Meanwhile, on Wednesday, Valeant released a series of letters between its CEO and Allergan's CEO and lead independent director. Allergan responded on Thursday with a release that reiterated why the company thinks it can deliver more value on its own.
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