lergan Inc., the Irvine company that makes Botox, has adopted a "poison pill" defense that could make it more difficult for Canadian company Valeant Pharmaceuticals International Inc. and activist investor Bill Ackman to force through a takeover bid.
The company's "stockholder rights plan" would allow existing shareholders to buy Allergan stock at a steep discount if any single investor acquires more than 10% of its shares.
The move prevents Ackman, who disclosed earlier this week that he had acquired 9.7% of Allergan's shares, from significantly increasing his holding.
Allergan, which announced the decision late Tuesday, said the program would be in place for one year.
Valeant, based in Laval, Quebec, and Ackman, chief executive of Pershing Square Capital Management, offered $46 billion in cash and stock for Allergan on Tuesday. They said combining the two companies would "create an unrivaled platform for growth and value creation in healthcare.”