February 28, 2019
(Reuters) – Appaloosa LP said on Thursday investor John Chevedden was backing the hedge fund’s proposal to split the roles of chairman and chief executive officer at Botox-maker Allergan Plc.
Chevedden, an activist investor who frequently files shareholder rights proposals, had withdrawn his own proposal for Allergan and would support Appaloosa’s, the hedge fund said, adding that this would eliminate unnecessary confusion.
“John Chevedden has worked tirelessly for many years to advance important corporate governance initiatives and we are gratified that he shares our view,” said Appaloosa President David Tepper.
Earlier this month, Tepper stepped up pressure on the botox maker to consider selling itself and splitting the top roles immediately, if management is unable to turn around recent lagging performance.
In response, the drugmaker said implementing Appaloosa’s recommendations would be “highly disruptive” to Allergan’s operations and on Thursday redirected Reuters to its earlier response when asked to comment.
Allergan’s shares, which fell 18.3 pct in 2018, have been lagging those of its peers on account of dropped plans to sell its women’s health unit, a disappointing revenue outlook for 2019 and increasing competition for many of its important drugs.
The company’s fourth-quarter sales fell 5.7 percent, while sales of its second-most important drug, Restasis, fell 17.7 percent.
(Reporting by Manas Mishra and Manogna Maddipatla in Bengaluru; Editing by Shinjini Ganguli)