In a win for Valeant and Pershing Square, a federal judge has decided that they can vote in takeover target Allergan's upcoming shareholder meeting.
Botox maker Allergan said in a statement Tuesday that it will file an emergency appeal.
Valeant Pharmaceuticals International Inc. and Pershing Square Capital Management, run by activist investor Bill Ackman, have made several offers for Allergan since April but have been rebuffed. Valeant's most recent offer amounted to about $53 billion. It has indicated that it is willing to go higher.
Allergan is holding a special meeting on Dec. 18. Shareholders can vote then on whether to replace the Irvine, California-based company's directors. A change in leadership could increase support for the deal.
Allergan had sought a court order that barred Valeant and Pershing from voting their shares and accused both parties of violating securities regulations.
The California court said Tuesday that while Allergan raised "serious questions" about the legality of some actions by Valeant and Pershing, it decided they can vote if they make certain disclosures about their trading activity and relationship.
"Although there is something inherently appealing about preventing someone who may have violated the securities laws from using their allegedly wrongfully acquired shares to carry out their ultimate plan ... the Court does not believe such an injunction is appropriate at this time and in this case," Judge David Carter wrote in his decision.
Shares of the Allergan rose $1.98 to close at $195.12 Tuesday. Valeant shares added 76 cents to close at $133.61.