Pershing Square 2015 European Investor Meeting [Slides]

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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

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

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