NEW PRODUCT: The Allergan Board Under Fire (A) and (B)

Coates (5)

The Case Development Initiative (CDI) at Harvard Law School recently debuted a new case study on the HLS Case Studies website. CDI develops role plays and case studies based on strategic and organizational issues faced by legal organizations. These cases focus on real life situations and are suitable for law school classrooms as well as professional development programs.

NEW PRODUCT: The Allergan Board Under Fire (A) and (B)

Post by Dr. Lisa Rohrer, Executive Director of the Case Development Initiative and Lecturer on Law at Harvard Law School

In a March 16 2016 Wall Street Journal commentary, Ronald Barusch suggested that the shareholders of Allergan deserved credit for fending off a 2014 takeover bid from Valeant Pharmaceuticals and Pershing Square Capital Management. In his article, Barusch remarked that although Allergan’s board appeared to have made the right decision (Valeant shares are trading over 70% below their share price when they approached Allergan), the company’s directors “faced withering criticism as they resisted the Valeant bid.”

A recently published HLS case study titled The Allergan Board Under Fire (A) and (B) details the dilemma faced by Allergan’s board of directors as they debated the takeover bid. The case, jointly published with Harvard Business School, is authored by HLS professor John Coates, HBS professors Lynn Sharp Paine and Suraj Srinivasan and HBS senior case researcher David Lane. It challenges students to think through the decisions faced by Allergan’s directors as they debated the merits of Valeant’s offer, media pressure surrounding the deal, and strategic alternatives involving other companies. The case study highlights the complexities induced by the increasing power of shareholders and how shareholder activism impacts boards of directors’ decisions around the company’s governance, management and business model.

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