Investors who want to take an activist stance by engaging with company management have to abide by FTC rules that require approval for anyone taking a stake greater than $84 million. At $593 million, Appaloosa is already well past that threshold, but the approval gives it flexibility if it decides it wants to become more than a passive investor.
Tepper's Appaloosa has been making changes to its holdings, disclosing earlier this week it exited a 4.6 million share stake in Apple and a 1.98 million share stake in Comcast and added new stakes in Applied Materials and Wells Fargo. It started building its Allergan stake in 2015.
Tepper is also in a $2.2 billion deal to buy the Carolina Panthers professional football team.
A spokesman for Appaloosa said he had no comment on the Allergan approval.
Allergan, the maker of Botox and Juvederm, began a strategic review of its business earlier this year, including possible sales of business units or a splitting up of the company.
CEO Brent Saunders said on a conference call in April, "While the board continues to evaluate the options, my preliminary view is that a fundamental shift in the overall business strategy is not necessary."
A spokeswoman for Allergan said the company "welcomes all investments in our company."