allergan should explore selling itself: appaloosa's tepper - active board

(Reuters)-
Billionaire hedge fund manager David Tepper has stepped up pressure on Allergan Plc, saying on Tuesday that pharmaceutical companies should consider selling themselves if management is unable to reverse the recent lag.
Tepper's hedge fund, Appaloosa LP, wrote to the board of directors of Allergan, just hours after botulinum toxin manufacturers announced that their board had added a former industry executive, but only when the person who now holds the position is replaced will it share the chairman and chief executive
Appaloosa has been pressing Allergan since last year to separate roles --
Currently held by Brent Sanders, who joined the company on 2014-
And recruit an external person to oversee the board. “If in fact (Allergan’s)
The board cannot or is unwilling to hold management accountable for its shortcomings, or to find a suitable replacement, and you have a fiduciary obligation to explore other options, including the merger or sale of the company, Tepper said in the letter.
Last year, Allergan conducted a strategic review and hired a number of consultants to carefully consider options such as stock buybacks, split companies and acquisitions.
However, Sanders then stated that he opposed a fundamental change in the business strategy, and at the end of the review, Allergan announced plans to sell its two small businesses, the women's health and infectious diseases sector accounts for only about 7% of their income.
The role of splitting the chairman and CEO has become a favorite appeal for some investors who think it will help the company to operate better.
Earlier this month, Appaloosa argued that by adding an independent chair, Sanders could get the help needed to improve the return.
However, Allergan said on Tuesday that the implementation of Appaloosa's proposal would be "highly disruptive" to the company's operations and affect saunders's ability to continue to implement the current strategy.
"While we thank Appaloosa for its input as we do with all shareholders, we strongly oppose that the CEO and chair positions must be separated immediately, allergan's board of directors said in a statement.
Appaloosa, which oversees about $12 billion, cut its stake in Allergan by about 42% to nearly one.
Regulatory documents submitted last week showed a total of 2 million shares at the end of December.
Over the past year, shares in Allergan have fallen by 15%, and as plans to sell some businesses have fallen, the company's shares have been lagging behind industry peers, with a disappointing 2019 revenue outlook, competition for some important drugs is also intensifying.
Earlier Tuesday, the company appointed Robert Hukin as the former CEO of the United States. S.
Celgene, a pharmaceutical company, said as a director that the appointment reflected its commitment to "positive board renewal.