Actavis Chairman Joins Zoetis Board In Deal With Ackman’s Fund

Actavis Chairman Joins Zoetis Board In Deal With Ackman’s Fund
Bill Ackman Photo via InsiderMonkey, Flickr (CC BY-ND 2.0)

Zoetis added Actavis Chairman Paul Bisaro as a second independent director under a deal the animal health products company reached with Bill Ackman’s hedge fund in February. At that time, Zoetis added William Doyle, a Pershing Square Partner, to its board.

Ackman won two board seats at Zoetis

As highlighted by ValueWalk in February, Bill Ackman’s Pershing Square Capital Management won two seats on the board of Florham Park, N.J.-based Zoetis. Last November, Ackman first unveiled his investment in Zoetis. Responding to the activist’s investment, Zoetis’s board of directors adopted a one-year shareholder rights plan, also known as a “poison pill.”

As part of the accord in February, Zoetis indicated that Bill Doyle, a member of Pershing Square’s investment team, was appointed to the board, and another director would be named later. Bill Ackman’s firm also agreed to use its 8.3% stake to back Zoetis’ other board members.

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In its statement Monday, Zoetis announced that its board appointed Paul M. Bisaro, executive chairman of Actavis, to the company’s board of directors. Following Bisaro’s induction, the animal health products company’s board will expand to 11 directors. Bisaro will serve on the compensation committee as well.

Ackman – The largest shareholder in Zoetis

Bill Ackman built a $2 billion stake in Zoetis in November, along with hedge fund Sachem Head Capital Management. Some believed the activist investor could push the animal health company to sell itself to a larger drug maker.

However, in February, Zoetis agreed with Pershing Square and Sachem Head to add two independent directors. Thomson Reuters data reveals Pershing Square was Zoetis’ largest shareholder as of Feb. 3, with an 8.35% stake.

Interestingly, Ackman and Bisaro’s company butted heads last year in a fight over the acquisition of Allergan, with the investor backing a rival bid from Valeant Pharmaceuticals. Actavis eventually won the battle with a bid valued at $70.5 billion.

As reported by ValueWalk, Ackman was aware that Valeant Pharmaceuticals was planning on purchasing Allergan, having partnered with the corporation in financing the acquisition. Ackman’s Pershing Square purchased call options on Allergan stock before the information was public. The acquisition was among the most contentious in history, as Allergan brought a lawsuit, followed by Valeant.

However, last week, Pershing Square and Valeant made up with Allergan. The two opposing forces have agreed to end their lawsuits.

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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