A06-18-0005 TB0523Michael H. Mofett Valeant’s Battle for Allergan It concerns us that, in the wake of the financial crisis, many companies have shied away from investingin the future growth of their companies. Too many companies have cut capital expenditure and even increased debt to boost dividends and increase share buybacks. We certainly believe that returning cash to shareholders should bepartofa balancedcapitalstrategy; however, when donefor thewrongreasons and at the expense of capital investment, it can jeopardize a company’s ability to generate sustainable long-term returns.Larry Fink, Chairman and CEO, BlackRock, March 21, 2014. BlackRock is the largest money management firm in the world.Te Chief Executive Ofcer (CEO) of Valeant Pharmaceuticals, J. Michael Pearson, announced an unusual partnership with the CEO of the well-known Wall Street hedge fund, Pershing Square, William “Bill” Ackman, in a proposed merger ofer on April 21, 2014. Te two companies, in a letter to the CEO of Allergan Pharmaceuticals David Pyott, announced a joint ofer for the ownership and control of Allergan.1 Dear Mr. Pyott:Valeant is pleased to provide Allergan shareholders with the opportunity to consider a strategically compelling and enormously value-creating opportunity to merge with Valeant. Our merger offer is comprised of $48.30 in cash and 0.83 of a Valeant share for each Allergan share based on the fully diluted numberof Allergan sharesoutstanding. Shareholderswill be able to elect their mix of cash andshares, subject to proration, in the combined company hereafter referred to as the “New Company.” Allergan shareholders will receive a substantial premium over Allergan’s April 10, 2014, unaffected stock price of $116.63 and will own 43% of the New Company.Wefirmlybelievethatapplying Valeant’s operating philosophy, strategy, and financialdiscipline to a broader set of superb assets will create extraordinary returns for shareholders over the short, intermediate, and long term.Sincerely, J. Michael Pearsoncc: Allergan, Inc., Board of DirectorsValeant’s merger proposal was unsolicited. It would, for all purposes, be a hostile transaction, one that would pose a very complex set of issues and choices for Allergan shareholders. At its core was the question of what was in the best long-term interests of both the business and its investors. Valeant Pharmaceuticals We spend less than 5% of our revenues on research and development. Instead, our innovation comes from acquiring companies and products that are already approved and in the market, so we avoid the risk associated with R&D.Michael Pearson, CEO, Valeant Pharmaceuticals, The Wall Street Journal, 2012. Valeant Pharmaceuticals (NYSE: VTX) was a multinational specialty pharmaceutical and medical device company.