The Wall Street Journal: Ackman reduces Valeant stake, cites taxes

William Ackman’s Pershing Square Capital Management LP trimmed its stake in Valeant Pharmaceuticals International Inc. to 8.5%, a move the hedge fund said was related to year-end tax planning.

Ackman has vigorously defended his multibillion-dollar investment in the pharmaceuticals company, which has faced a series of questions about its drug pricing, business practices, and accounting and disclosures. Valeant VRX, -0.66%  , based in Canada, has defended its accounting and has said it has found no evidence of illegality.

Thursday’s disclosure comes about a month after Ackman’s fund reported a boosted 9.9% stake in Valeant, having taken advantage of the beaten-down market for the stock to build up its position.

The fund now beneficially owns 29.1 million shares, which include 16.6 million common shares, along with the 12.5 million shares underlying options, according to a regulatory filing. As of Thursday’s close at $101.65, the investment is valued at about $2.96 billion.

Pershing Square said it sold the stock to generate a tax loss for investors in two of its funds. Selling shares and locking in a loss would allow investors to offset trading profits elsewhere in their portfolios and lower their 2015 taxes.

An expanded version of this report appears at WSJ.com.

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