Bill Ackman wants to wipe that smile off your face.
The activist billionaire is making his boldest, biggest bet ever — teaming up with Valeant Pharmaceuticals to launch a takeover of Botox maker Allergan, a $42 billion market cap company.
Ackman has spent $3.2 billion to take a 9.7 percent stake in the company, according to a regulatory filing Monday.
The alliance of an activist hedge-fund manager with a corporation to launch a takeover is unusual, although Ackman is known for pushing the envelope. For its part, Valeant has a successful track record of acquisitions, including Bausch & Lomb, and has not shied away from going hostile.
Valeant had been trying, unsuccessfully, to buy Allergan — which makes the popular cosmetic treatment that works by paralyzing face muscles — for the past 18 months, said a source close to the situation.
Its CEO, Michael Pearson, a former McKinsey executive, approached Ackman through the hedgie’s former Harvard classmate, Bill Doyle, who joined Ackman’s Pershing Square hedge fund last year.
Doyle previously worked with Pearson at McKinsey.
“[Pearson] knew [Pershing Square] could get it done,” said the source.
The Canadian pharmaceutical company, which had $5.8 billion in revenue last year, and the $13 billion Pershing Square struck their deal in early February. They have created a jointly owned fund to make the offer.
Valeant is planning to propose a merger with Allergan in a stock-and-cash deal that will include around $15 billion in cash and the rest in Valeant stock, the filing said.
Allergan stock, which has been climbing since Ackman began buying shares and options on Feb. 25, closed at $142 Monday, giving the hedge fund mogul a $900 million gain already.
It soared 18 percent in after-hours trading following reports of the proposed takeover.
Valeant, which is short on cash due to its acquisition spree, is only contributing $75.9 million to the joint fund with Pershing Square.
Under the terms of their joint arrangement, Valeant has until May 2 to make its offer and will have to consult with Ackman before making a deal, according to the filing.
If the deal goes through, Pershing Square will hold onto at least $1.5 billion of Valeant stock.
Ackman and Allergan declined to comment. Valeant did not return a call.