Elliot Management, the hedge fund headed by billionaire investor Paul Singer, boosted its stake in Celesio AG (ETR:CLS1) (FRA:CLS1), a pharmaceutical holding company based in Germany to prevent the $8.3 billion acquisition proposal of McKesson Corporation (NYSE:MCK).
Elliot International controls Celesio’s voting rights
On Tuesday, Celesio AG (ETR:CLS1) (FRA:CLS1) revealed that Elliot International already controls 25.16% voting rights in the company. Including the two convertible bonds of the pharmaceutical holding company, the hedge fund owns 21.13% voting rights.
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McKesson Corporation (NYSE:MCK) is the largest pharmaceutical company in the United States. Its proposal to takeover Celesio AG (ETR:CLS1) (FRA:CLS1) is subject to the approval of the shareholders that collectively own a 75% stake in the German pharmaceutical holding company.
Acquisition agreement terms
Under the terms of the terms of the acquisition agreement, McKesson Corporation (NYSE:MCK) will purchased the 50.01% stake owned by Franz Haniel & Cie GmbH investment company for €23 per share, and to start the tender offer of the remaining publicly traded shares of the company for the same price.
Singer is widely recognized for his investment strategy of boosting his stockholdings in companies that are targeted for takeover. His primary objective is to demand a higher acquisition price.
Elliott Management raised its capital
In September, Elliot Management sent an e-mail to investors indicating that it raised $3.3 billion in new capital including $2.2 billion in new investments and $1.1 billion in extensions of capital from investors for the fourth quarter capital commitment.
The hedge fund’s affiliates, Elliot Associates and Elliot International gained 7.3% and 7.1% through August, respectively. Singer had been active investing in new companies such as Kabel Deutschland Holding AG (FRA:KD8), Emulex Corporation (NYSE:ELX) among others.
The hedge fund owns a 10.9% stake in Kabel Deutschland as of September. Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) won the approval of the shareholders of Kabel Deutschland Holding AG (FRA:KD8) (ETR:KD8) (OTCMKTS:KBDHF) to acquire the company for €87 per share. It is unclear if the hedge fund was among those who voted in favor of the proposal. Elliot Management netted around €850 million when it sold its entire stake in Kabel Deutscheland.