Pershing Square Capital Management and Valeant Pharmaceuticals are to pay $US270 million ($A370 million) to settle a lawsuit that alleged their trading in Allergan was illegal, allowing William Ackman to put behind him the last verges of an investment that created turmoil at the Pershing Square hedge fund the billionaire heads.
Allergan shareholders (as plaintiffs) allege Mr Ackman, Pershing Square and Valeant improperly traded ahead of their takeover bid for Allergan in 2014.
According to an agreement in principle, reached after a judge issued a tentative opinion that heavily sided with the shareholder plaintiffs, Pershing Square will pay $US193.75m and Valeant will pay $US96.25m, which is a shift from an earlier agreement the two had struck when Valeant would have paid 60 per cent in a settlement.
Valeant and Pershing Square partnered in early 2014 to try to buy Allergan for more than $US50 billion.
The bid failed when Actavis swept in with a $US66bn offer for Allergan, however Pershing Square walked away with $US2.5bn profit and Valeant with more than $US 400m.