By David Benoit and Jonathan D. Rockoff 

A federal judge signaled Tuesday he would approve a $290 million settlement reached by Pershing Square Capital Management, Valeant Pharmaceuticals International Inc. and the shareholders of Allergan PLC who had alleged the two firms improperly profited from their failed attempt to buy the maker of Botox.

In a hearing Tuesday, the judge also said he intends to publicly issue a final version of his tentative opinion he had privately issued last month that rejected two key legal arguments Pershing Square and Valeant had made, saying he wanted his order to become part of legal case law, according to people familiar with the hearing.

His views were being closely watched by hedge funds and others wondering if the trading strategy could be replicated.

The settlement was reached last month to end a suit that threatened William Ackman and Valeant's profits on their lucrative Allergan partnership, which earned them collectively about $2.6 billion, though they failed to buy the company as they intended.

The hedge fund and the pharmaceutical company tried to buy Allergan for more than $50 billion in early 2014. The hedge fund took a 9.7% stake in Allergan to try to win enough support for the deal. But the bid failed when Actavis PLC swept in with a $66 billion offer for Allergan.

Write to David Benoit at david.benoit@wsj.com and Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

January 16, 2018 16:54 ET (21:54 GMT)