According to CNBC's David Faber, Bill Ackman has exited his once darling stock, Valeant Pharmaceuticals.
Bill Ackman is leaving Valeant Pharmaceuticals.
The billionaire founder of hedge fund Pershing Square, who was once the company's biggest cheerleader, has sold his investment and will step down from the Valeant's board until its upcoming election.
The stock is falling in after hours trading on this news.
Jefferies will be handling the transaction for Ackman, selling 27.2 million shares valued at $306,400,000, or $11.10-$11.40 per share. Sources tell Business Insider that Jefferies is indicating interest on half the stock and is on the hook for the balance that doesn't get paid.
The stock closed Monday at $12.10. CNBC's David Faber first reported the news, citing sources.
"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," Pershing Square said in a statement. "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."
Pershing's full statement below:
Pershing Square Capital Management, L.P. Announces Sale of Its Investment In Valeant
Pharmaceuticals International, Inc.
New York, 13 March 2017 //‐ Pershing Square Capital Management, L.P. (“Pershing Square”) announced today that it has sold its investment in Valeant Pharmaceuticals International, Inc. (“Valeant”) (ticker: NYSE: VRX). Pershing Square CEO Bill Ackman and Vice Chairman Steve Fraidin will remain on the Valeant board until the upcoming annual meeting but will not stand for re‐election.
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.
After Bill Ackman and Steve Fraidin joined the Valeant board in March 2016, they worked with their fellow directors to take important steps to stabilize Valeant and position it for the future. Those steps included:
- Replacing senior management with talented executives, including CEO Joe Papa, CFO Paul
- Refreshing the board of directors with 10 new members;
- Returning the company to a current and timely filing schedule with the SEC;
- Receiving appropriate amendments and waivers under applicable credit agreements;
- Announcing a strategy to sell non‐core assets to improve the company’s balance sheet;
- Paying down ~$2.7 billion of net debt with the sale of non‐core assets and free cash flow generation; and last week, priced a $3.25 billion bond refinancing and covenant waiver package which extends maturities and reduces the company’s exposure to floating interest rates.
CEO Joe Papa and his team have done an excellent job refocusing and setting a new course for the company. We wish the company and its extremely hard working, dedicated and loyal employees great success in the future.
