Mutual fund firm Capital Research and Management held 6.3 percent of Allergan's stock, according to Factset, and was the company's largest shareholder as of March 31. People close to the matter said the mutual fund sold its stake after meeting with Chief Executive David Pyott.
The development comes at a time when Allergan is attempting to stave off a hostile takeover bid by Valeant Pharmaceuticals and activist investor William Ackman. The two had initially offered Allergan $152.89 per share but have upped the offer to about $179.25 a share. As of Friday's closing price the offer now stands at roughly $173.24 per Allergan share.
Allergan has consistently dismissed the offer saying it could add more shareholder value independently and that it was weary of Valeant's business model. Valeant has been adding shareholder value through multiple large acquisitions, as opposed to using research and development, as claimed by Allergan.
In another development, Valeant has complained to the Securities and Exchange Commission and the Autorité des Marchés Financiers in Canada after Allergan made, according to Valeant, "false and misleading comments" about its eye care business, Bausch & Lomb.
Valeant said Friday that Bausch & Lomb improved its sales by 12 percent over the previous year. But Allergan in an SEC filing said Bausch & Lomb's sales were stagnant or declining.
"Allergan's continued disparagement of Valeant and repeated questioning of Bausch & Lomb's performance demonstrate their fundamental lack of knowledge about Valeant's business," said Michael Pearson, chief executive of Valeant.
Valeant decided to complain after its Canadian shareholders expressed concern about the allegations. Allergan has been trying disparage Valeant's business model and claiming that it wasn't a responsible owner of businesses it acquired.