Date: November 16, 2005 Source: Third Point LLC
For Release: Immediately Contact: Georgeson Shareholder
Telephone: (888) 293-6729
Third Point LLC to Run Slate of 8 Nominees for Election to
the Board of Directors of Ligand Pharmaceuticals Incorporated
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NEW YORK, NEW YORK, November 16, 2005 - Third Point LLC today released a letter
to the stockholders of Ligand Pharmaceuticals Incorporated (the "Company") (OTC:
LGND) confirming the entry into a Stipulated Order and Final Judgment with the
Company establishing January 31, 2006 as the date for the Company's next
stockholders meeting (the "Stockholders Meeting") and announcing its intention
to run a slate of eight nominees for election to the Company's Board of
Directors at the Stockholders Meeting. The text of the letter follows.
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Third Point LLC is an investment management firm founded in 1995 that serves as
investment manager or adviser to a variety of funds and managed accounts. The
firm is based in New York, with offices in Los Angeles, Sunnyvale, Hong Kong,
and Bangalore and expects to open shortly its London office.
* * * * *
November 16, 2005
Dear Fellow Ligand Shareholders:
As Ligand Pharmaceuticals ("Ligand" or the "Company") recently announced, we
have settled our litigation with the Company. Under the settlement, Ligand will
be required to hold a meeting of stockholders on January 31, 2006 for the
purpose of electing directors. The Company's Board of Directors will set a
record date for the meeting, which must be between December 5 and December 15,
2005.
Although this settlement resolves an important dispute and finally forces the
Company to hold an election of directors, we have not been able to resolve the
larger issues - whether Ligand will agree to immediately embark on a process to
explore and act on strategic alternatives, and who will control that process.
To address these fundamental issues and to avoid a contested election, we had
made a proposal to the Company, which expired last Friday afternoon. The
centerpiece of our settlement proposal was the addition of three of our nominees
to the Board and the immediate creation of a special committee of three
directors to pursue strategic alternatives in order to maximize shareholder
value. We had proposed that two of our nominees be appointed to the special
committee, and, consistent with Delaware law, the special committee would have
had broad powers to do its job but would have been required to obtain full Board
approval for any proposal involving a merger
or similar transaction. In this way, we had hoped to balance our goal of
maximizing shareholder value with the current Board's apparent goal of
maintaining control of the Company.
Given the reasonableness of our compromise proposal, we're concerned that
management has become isolated and that Ligand's full Board may not have been
fully informed or consulted about the issues we've raised and the proposal we've
made. Nonetheless, because management has not accepted our compromise proposal
and has failed even to discuss it with us, we will now seek control of the Board
at the upcoming election by running a full slate of eight directors at the
January meeting. This will allow us to move forward quickly with efforts to
maximize shareholder value and will put to rest our lingering doubts about
whether the current Board would have favorably received any recommendations made
by our proposed special committee. All of our nominees, whom we will name
shortly, will be committed to the process of value maximization and to acting in
the best interests of Ligand's shareholders.
We have been urging management for some time now to explore and act on options
to maximize shareholder value. Lately, we have had indications (which may or may
not prove accurate) that the Company has quietly made moves in that direction.
Given management's resistance to our past calls to explore strategic
alternatives, we cannot assure you, and are not ourselves prepared to assume,
that management has suddenly become committed in a serious way to such a
process. But even if management actually has undergone such a "conversion"
(albeit with a proxy contest looming), we think it is nonetheless important that
such a process be run by directors who have been committed to that goal from the
outset, and that is why we will be proposing nominees for all eight seats on the
Company's Board of Directors.
One final point: although we will be seeking control of the Company in order to
establish or guide a process of exploring and acting on strategic alternatives,
we have no intention of making wholesale changes in the Company's personnel or
day-to-day operations. We have previously expressed our admiration for the
Company's scientific staff, and we continue to view Ligand's employees (other
than Messrs. Robinson and Maier) as one of its most significant assets. As the
holder of almost 10% of the Company's common stock, we have a very large vested
interest in maintaining the great value we see in the Company, and we will make
every effort to do so.
Sincerely,
Third Point LLC
Daniel S. Loeb
Chief Executive Officer
THIRD POINT STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ ITS PROXY
STATEMENT WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION,
INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH PROXY
SOLICITATION. ANY SUCH PROXY STATEMENT, WHEN FILED, AND ANY OTHER
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RELEVANT DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT
HTTP://WWW.SEC.GOV. IN ADDITION, STOCKHOLDERS MAY ALSO OBTAIN A COPY OF ANY SUCH
PROXY STATEMENT, WHEN FILED, WITHOUT CHARGE, BY CONTACTING THIRD POINT'S PROXY
SOLICITOR, GEORGESON SHAREHOLDER COMMUNICATIONS INC., AT ITS TOLL-FREE NUMBER:
(888) 293-6729, OR AT PROXYINFO@GSCORP.COM.
The following persons are anticipated to be, or may be deemed to be,
participants in any such proxy solicitation: Third Point LLC, Third Point
Offshore Fund, Ltd., Third Point Partners LP, Third Point Ultra Ltd.,
Lyxor/Third Point Fund Ltd., Third Point Partners Qualified LP, Daniel S. Loeb,
Brigette Roberts, MD and Jeffrey R. Perry. Certain of these persons hold direct
or indirect interests as follows: Third Point LLC may be deemed to have
beneficial ownership over 7,375,000 shares of common stock; Third Point Offshore
Fund, Ltd. owns 4,744,300 share of common stock; Third Point Partners LP owns
955,300 shares of common stock; Third Point Ultra Ltd. owns 785,100 shares of
common stock; Lyxor/Third Point Fund Ltd. owns 436,400 shares of common stock;
and Third Point Partners Qualified LP owns 453,900 shares of common stock.
Daniel S. Loeb, as the managing member of Third Point LLC, may be deemed to
beneficially own 7,375,000 shares of common stock. Brigette Roberts, MD and
Jeffrey R. Perry have no direct or indirect interests, by security holdings or
otherwise, required to be disclosed herein, except each such person's interest
in being nominated and elected as a director of the Company.
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