Sector News

Actavis aims to add Allergan CEO to its board: sources

January 16, 2015
Life sciences
(Reuters) – Allergan Inc (AGN.N) Chief Executive David Pyott is close to joining the board of directors of Actavis Plc (ACT.N), which reached a deal to buy the Botox-maker for $66 billion in November, three people familiar with the matter said on Thursday.
 
Actavis CEO Brent Saunders is trying to recruit Pyott to join the board and is working through corporate governance issues, the people said, asking not to be named because the matter is private.
 
They said Saunders described the plan at a small meeting with shareholders during the J.P. Morgan Healthcare conference in San Francisco this week. One investor who attended the meeting told Reuters that adding Pyott to the board could lend more credibility to Actavis’s efforts to integrate Allergan into its operations.
 
Actavis said in November that two members of the Allergan board would be invited to join the board of the combined company, but did not specify what Pyott’s new role would be.
 
If Pyott were to join the Actavis board, he would be considered a non-independent board member because of his ties to the acquired company, bringing the number of non-independent board members at Actavis to three. They include Saunders and Executive Chairman Paul Bisaro.
 
While proxy advisory firms like ISS do not have guidelines on the precise number of non-independent directors they like to see on a board, outsiders typically view a board more favorably if it has fewer non-independent directors.
 
Actavis said in December it would replace the majority of Allergan’s top executives once the deal closes, with the exception of Allergan president Doug Ingram who will serve as a special adviser to Saunders.
 
The deal, which thwarted a seven months-long hostile attempt by Valeant Pharmaceuticals Inc (VRX.TO) to buy Allergan, is expected to close in the second quarter of this year.
 
Officials for Actavis and Allergan declined to comment.
 
(Reporting by Caroline Humer and Olivia Oran; Editing by Michele Gershberg and David Gregorio)

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