Bill Ackman’s Pershing Square Capital Management European Investor Meeting for April 28, 2015 discussing investments in Allergan, Valeant, Herbalife, Canadian Pacific and more.
Pershing Square – Allergan Inc
- At investment inception, ~$37bn market cap specialty pharmaceutical company
- Leader in aesthetics, dermatology, and ophthalmology ?
- In February 2014, Pershing Square formed JV with Valeant to assist in Allergan merger
- Between February 25th and April 21st , Pershing Square acquired stock and options representing 9.7% of Allergan at an average cost of $128/share
- On April 22nd, Valeant and Pershing Square announced an unsolicited offer to acquire Allergan for $161 per share, a 38% premium to Allergan’s unaffected stock price
- On March 17th, Allergan merged with Actavis for $242 per share in cash and stock representing a 88% premium to Pershing Square’s cost basis
Valeant Pharmaceuticals
- At investment inception, ~$54bn market cap specialty pharmaceutical company
- Leader in dermatology, ophthalmology, branded generics, and gastroenterology
- Pershing Square developed a strong relationship with Valeant during our 2014 partnership
- Pershing Square was prohibited from acquiring shares in Valeant until January 2015
- In February 2015, Pershing Square bought its first shares in Valeant at a cost of ~$161
- In late February 2015, acquired Salix for $15.8bn
- Today, Pershing Square owns 19.47m shares of Valeant, representing 5.7% of the company, at an average cost of $197
Pershing Square’s Investment in Valeant
- We bought our shares with the confidence of:
- Our extensive initial research of the company
- The validation of our work over the following year
- Increased conviction in management, following our 10-month Allergan partnership
- We bought our first shares at ~$161 share on February 9th, 2015
- Today, we own 5.7% of Valeant, at an average cost of ~$196
CP: Remarkable Transformation Continues
- 2014 results highlight continued rapid pace of transformation under Hunter Harrison and the reconstituted CP Board
- Annual earnings per share growth of 32% despite record winter conditions in Q1 and lingering industry-wide congestion
- Operating Ratio of 64.7%, third-best in industry
- CP reached its four-year targets, including a 65% Operating Ratio, in just two years given the rapid pace of the company’s operational transformation
- Board and management-led initiatives on capital allocation are creating shareholder value
- Prudent target leverage of 2x EBITDA
- Repurchased $2bn of stock, or 6% of shares outstanding, at $199 CAD per share
- In May, Hunter Harrison’s contract was extended one year through 2017
See full PDF below.
