After a long relationship that has seen the rapid rise and massive fall of Valeant’s stock price, Pershing Square Capital Management CEO Bill Ackman stated that his hedge fund has sold all its shares in Valeant.
Pershing Square is selling its 27.2 million shares for a total value of $306.4 million, well below the 3.9 billion Mr. Ackman disclosed his fund held in a 2015 securities filing. Mr. Ackman and his hedge fund made national headlines in 2014 after, in an unprecedented move, Pershing Square teamed up with Valeant to pursue an hostile takeover of Allergan, which was ultimately unsuccessful.
Since then, Mr. Ackman has been a major investor in Valeant, the parent company of Bausch + Lomb. However, Valeant has faced multiple controversies since thee attempted takeover of Allergan, including criticism over drug pricing and allegations surrounding its relationship with the specialty pharmacy Philidor Rx, as well as questions regarding the reporting of some of its financial results.
In a statement this week on behalf of Pershing Square, Mr. Ackman stated, "At its current market value, the Valeant position represented 1.5% to 3% of the various Pershing Square funds; however, the investment required a disproportionately large amount of time and resources. As a result, we elected to sell our investment and realize a large tax loss which will enable us to dedicate more time to our other portfolio companies and new investment opportunities."
Mr. Ackman indicated that he will step down from Valeant's board, which he joined last year, following the company’s annual meeting.
Following Mr. Ackman’s decision this week to sell his stake in Valenat, shares of the Canadian company dropped to their lowest level since 2009.
In November, reports emerged that Valeant is exploring a sale of its eye surgery equipment business – part of its Bausch + Lomb franchise – in an effort to pay down debt. The Wall Street Journal, citing people familiar with the matter, reported that it eye surgery equipment business could fetch as much as $2.5 billion in a sale. The report did not mention a potential suitor for the business.
The Bausch and Lomb franchise is seen by many analysts as Valeant’s “crown jewel” investment. In 2016, Bausch & Lomb achieved revenues of $4.6 billion.