In what certainly looks like a PR dump for any news you don’t want blown out of proportion, Mr Bill Ackman decided to wait till the end of the year to settle his pending lawsuits against Allergan for a whopping $194 million. If one would ever decide to write ‘marketing tips for 2018,’ saying that you are willing to pay that amount for a lawsuit of which you state that "we continue to believe the case had absolutely no merit," does not seem like the best strategy to us.
Yes, indeed, Pershing Square CEO Bill Ackman continued to claim that his company "decided, however, that it was in the best interest of our investors to settle the case now instead of continuing to spend substantial time and resources pursuing the litigation."
Mr Ackmann’s firm decided thus to settle the firm's lawsuits with Allergan shareholders over the attempted acquisition of Allergan by Pershing Square and Valeant Pharmaceuticals back in 2014.
The hedge fund firm of Mr Ackman and Valeant have decided to split the $290 million settlement with Pershing Square paying $194 million and Valeant paying $96 million.
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Bill Ackman And Valeant Settle Allergan Insider Trading Lawsuit For … - Forbes <a href="https://t.co/hEETi2YlSV">https://t.co/hEETi2YlSV</a></p>— Bill Ackman Blog (@BillAckmanBlog) <a href="https://twitter.com/BillAckmanBlog/status/947454552894083072?ref_src=twsrc%5Etfw">December 31, 2017</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Pershing continued to state that: "though we always have remained confident in our position and were prepared to try these cases on their merits, this agreement will eliminate disruption to our business."
Once again, it seems outrageous to be spending $194 million to settle a case for which Pershing had said they would be putting aside $75 million, but what do we know about arithmetic. Ackman has of course always been considered a contrarian investor by the market, and thus his investment strategies at first never make any sense, this latest move included.