Big investor hits back at critics as Valeant’s war of words gathers pace
Valeant have hit the mainstream news again after key investor Bill Ackman mounted a robust defence of the company, ruling out any sale of its most important assets but hinting at possible price cuts and a name change in the future.
Ackman’s firm owns 9% of Valeant, whose chequered recent history was under the spotlight over the past week as their outgoing CEO expressed “regret” for the company’s practices at a US Senate hearing. Also, the publication of their long awaited annual report for 2015 has helped to assuage fears of a potential default in the future. Alongside the filing of the form 10-K, a management shakeup at the top was also indicated at Valeant.
Mega billionaire Warren Buffet singled out Valeant on an American morning show as well as his company Berkshire Hathaway’s annual general meeting, calling their approach “enormously flawed”. He added: “I don’t think you’d want your sun to grow up and run a company in the manner that Valeant was run.”
At the event, vice chairman of Berkshire Hathaway, Charlie Munger, also criticised Valeant. Describing it as a “sewer”, he said that “those who created it deserve all the opprobrium that they got.”
Following the release of these statements, shares at Valeant fell as much as 13%, prompting the rebuttal from Ackman on CNBC’s “Halftime Report”.
He said: “The company is not a sewer. It is not fair to indict an entire company based on the actions of a few… The time to invest is pretty much when everyone thinks this is a bad idea. [Valeant] is the cheapest large company I’ve seen in my career.”
He indicated that the board understood the public outcry at Valeant’s actions and indicated that, with a new CEO and board members in place, the company was well placed to make a recovery.
Upon Ackman’s statement, Valeant’s stock recovered to trade down just 2% for the day.
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