Visit From DoJ Leads To An Updating On Valeant: The Three Year Old Comments On B+L’s Debt Come Home To Roost

Well. . . I was thinking it was about time to update that fascinating back-story, on Fred Hassan’s role at old Bausch & Lomb — as it was sold to Valeant, three years ago, now. But I am rushing this to print, because (as happens from time to time, here), we were visited by the Department of Justice, overnight — and the old B+L posts were searched and downloaded. [Back in May of 2008, the appearance of a high ranking DoJ visit(or) really put this blog on the MSM’s map — during “Fast” Fred Hassan’s fumbles, at the legacy S-P (now Merck).] So it is with an ironic echo, that I write again — on this topic. To be sure, Valeant has run into many other problems of its own making, along the way — but this may point back to some of the seminal ones.

It seems that overnight, Mr. Ackman’s Pershing Square has taken a Valeant board seat, and indicated he is now an activist investor — calling in public remarks for potential transactions. Chief among those apparently — is a move to reduce debt, by selling the B&L assets. You will recall that I repeatedly bemoaned Mr. Hassan’s role (via Warburg Pincus) in adding about $700 million to B&L’s debt load, so that Warburg Pincus could take nearly that amount out of the then struggling company. And that is just what happened, a little under three years ago.

But now both Mr. Ackman, and the DoJ, apparently, are at least curious as to whether that series of transactions might have violated Valeant’s fiduciary duties, as it negotiated to acquire B+L, and assume its debt load. [Recall here that Goldman Sachs was advising on both sides of this $9 billion deal — which was unheard of in a deal of that size, in the public life sciences space. Tsk. Tsk.] I may not offer any additional updates, other than to say. . . well, none of this should be surprising to my longer-term readers. Here’s an overnight Bloomberg quote — seems to quite oddly, and closely, echo mine — of three Springs past (back in May of 2013):

. . . .Billionaire activist investor Bill Ackman raised the possibility Tuesday that under-pressure drugmaker Valeant Pharmaceuticals International Inc. could consider selling part of its Bausch & Lomb eye-care business to reduce debt. . . .

“Either management will restore confidence in the reputation of the company with the public and the investment community or they won’t,” Ackman said in response to a question from a member of the conference audience. “If they can’t then one of two things will happen — new management will be brought in or the business will be sold. . . .

Probably best just to search my site, in the handy box above, for Valeant or B+L — there are about twenty posts on the whole story, here. But I do feel just a smidge of satisfaction. Too bad for Valeant and legacy B&L shareholders, though. Onward, with a smile. . .


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