Toward the end of the Boston marathon last April 21, the only thing keeping Cary Hyden going was the promise of a hot shower, a nap and, he says, a “decent restaurant meal.” But that was not to be. When Hyden, head of Latham & Watkins’ Orange County corporate group, got to his hotel room, he found several missed calls from his partner Paul Tosetti. Longtime client Allergan Inc., maker of the anti-wrinkle drug Botox, had received a $45.6 billion cash-and-stock offer from Canada’s Valeant Pharmaceuticals Inc.
Allergan, a company with little long-term debt and an active research and development program, wanted no part of Valeant, which mostly grew by buying successful rivals and cutting back on R&D. Allergan had already rebuffed one expression of interest from Valeant. But this time, Pearson had backup: the brash activist investor William Ackman and his hedge fund Pershing Square. As part of a self-styled joint bid, Ackman had quietly accumulated nearly 10 percent of Allergan’s stock. Over the next 24 hours, Hyden and Tosetti helped Allergan adopt a poison pill; the provision allowed shareholders to buy stock blocks at a discount if anyone obtained a 10 percent stake, making a takeover prohibitively expensive.
