Bioverativ Inc. (BIVV) Is Too Rich For My Blood But Activist Jeff Ubben Likes It

Published on March 2, 2017 at 9:01 pm by Inan Dogan, PhD in Hedge Funds

Bioverativ Inc. (NASDAQ:BIVV) was spun off by Biogen (BIIB) about a month ago at a valuation of about $4.7 billion. The shares quickly appreciated and the company is now valued at $5.7 billion. Its two drugs brought in about $850 in sales in 2016. So, Biogen’s hemophilia unit is now valued at 7 times sales. I like spinoffs but I like value stocks more. I don’t think Bioverativ Inc. is a value investment at this valuation.

Jeff Ubben’s Valueact Capital doesn’t agree with me. I should note that Valueact is one of my favorite hedge funds and it has a solid track record. It was successful in turning around Microsoft, an elusive target for other activist hedge fund managers like David Einhorn and Curtis Macnguyen. Ubben has more than $400 million riding on Bioverativ Inc. at the moment and increased its stake by more than 400K shares over the past few weeks.

The details of this transaction can be seen below:

VALUEACT CAPITAL

Ownership Summary Table

Name	Shared Dispositive Power	Aggregate Amount Owned Power	Percent of Class
S.S. OR	8,132,880	8,132,880	7.5%
S.S. OR	8,132,880	8,132,880	7.5%
S.S. OR	8,132,880	8,132,880	7.5%
S.S. OR	8,132,880	8,132,880	7.5%
S.S. OR	8,132,880	8,132,880	7.5%
S.S. OR	8,132,880	8,132,880	7.5%

Page 1 of 11 – SEC Filing

=============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities and Exchange Act of 1934

(Amendment No. 1)

Bioverativ Inc.
————————————————
(Name of Issuer)

Common Stock
————————————————
(Title of Class of Securities)

09075E100
————————————————
(CUSIP Number)

Allison Bennington, Esq.
ValueAct Capital
One Letterman Drive, Building D, Fourth Floor
San Francisco, CA 94129
(415) 362-3700
————————————————
(Name, address and telephone number of Person
Authorized to Receive Notices and Communications)

Allison Bennington, Esq.
ValueAct Capital
One Letterman Drive, Building D, Fourth Floor
San Francisco, CA 94129
(415) 362-3700

February 28, 2017
————————————————
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].

Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

This information required on the remainder of this cover page shall not be
deemed to be “filed” for the purpose of Section 18 of the Securities Exchange
Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
=============================================================================

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Page 2 of 11 – SEC Filing

SCHEDULE 13D
————————– ————————-
CUSIP NO. 09075E100 Page 2 of 12
—————————————————————————–
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)

ValueAct Capital Master Fund, L.P.
—————————————————————————–
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
—————————————————————————–
3. SEC USE ONLY

—————————————————————————–
4. SOURCE OF FUNDS (See Instructions)*

WC*
—————————————————————————–
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
—————————————————————————–
6. CITIZENSHIP OR PLACE OF ORGANIZATION

British Virgin Islands
—————————————————————————–
7. SOLE VOTING POWER
0
NUMBER OF ———————————————————-
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 8,132,880**
OWNED BY EACH ———————————————————-
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
———————————————————-
10. SHARED DISPOSITIVE POWER
8,132,880**
—————————————————————————–
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

8,132,880**
—————————————————————————–
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
—————————————————————————–
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

7.5%
—————————————————————————–
14. TYPE OF REPORTING PERSON

PN
—————————————————————————–
*See Item 3
**See Item 2 and 5

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Page 3 of 11 – SEC Filing

SCHEDULE 13D
————————– ————————-
CUSIP NO. 09075E100 Page 3 of 12
—————————————————————————-
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)

VA Partners I, LLC
—————————————————————————–
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
—————————————————————————–
3. SEC USE ONLY

—————————————————————————–
4. SOURCE OF FUNDS*

00*
—————————————————————————–
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
—————————————————————————–
6. CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware
—————————————————————————–
7. SOLE VOTING POWER
0
NUMBER OF ———————————————————-
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 8,132,880**
OWNED BY EACH ———————————————————-
PERSON WITH 9. SOLE DISPOSITIVE POWER
0
———————————————————-
10. SHARED DISPOSITIVE POWER
8,132,880**
—————————————————————————–
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

7.5%
—————————————————————————–
14. TYPE OF REPORTING PERSON

00 (LLC)
—————————————————————————–
*See Item 3
**See Item 2 and 5

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Page 4 of 11 – SEC Filing

SCHEDULE 13D
————————– ————————-
CUSIP NO. 09075E100 Page 4 of 12
—————————————————————————-
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)

ValueAct Capital Management, L.P.
—————————————————————————–
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
—————————————————————————–
3. SEC USE ONLY

—————————————————————————–
4. SOURCE OF FUNDS*

7.5%
—————————————————————————–
14. TYPE OF REPORTING PERSON

PN
—————————————————————————–
*See Item 3
**See Item 2 and 5

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Page 5 of 11 – SEC Filing

SCHEDULE 13D
————————– ————————-
CUSIP NO. 09075E100 Page 5 of 12
—————————————————————————-
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)

ValueAct Capital Management, LLC
—————————————————————————–
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
—————————————————————————–
3. SEC USE ONLY

—————————————————————————–
4. SOURCE OF FUNDS*

7.5%
—————————————————————————–
14. TYPE OF REPORTING PERSON

00 (LLC)
—————————————————————————–
*See Item 3
**See Item 2 and 5

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Page 6 of 11 – SEC Filing

SCHEDULE 13D
————————– ————————-
CUSIP NO. 09075E100 Page 6 of 12
—————————————————————————–
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)

ValueAct Holdings, L.P.
—————————————————————————
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
—————————————————————————–
3. SEC USE ONLY

—————————————————————————
4. SOURCE OF FUNDS*

7.5%
—————————————————————————–
14. TYPE OF REPORTING PERSON

PN
—————————————————————————–
*See Item 3
**See Items 2 and 5

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Page 7 of 11 – SEC Filing

SCHEDULE 13D
————————– ————————-
CUSIP NO. 09075E100 Page 7 of 12
—————————————————————————–
1. NAME OF REPORTING PERSON/S.S. OR I.R.S. INDENTIFICATION NO. OF ABOVE
PERSON (entities only)

ValueAct Holdings GP, LLC
—————————————————————————
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
—————————————————————————–
3. SEC USE ONLY

—————————————————————————–
4. SOURCE OF FUNDS*

7.5%
—————————————————————————–
14. TYPE OF REPORTING PERSON

00 (LLC)
—————————————————————————–
*See Item 3
**See Items 2 and 5

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Page 8 of 11 – SEC Filing

————————– ————————-
CUSIP NO. 09075E100 Page 8 of 12
—————————————————————————–

This Amendment No. 1 to the Schedule 13D supplements the information set
forth in the Schedule 13D filed by the Reporting Persons with the United
States Securities and Exchange Commission (the “SEC”), as amended from time
to time (the “Schedule 13D”), relating to the Common Stock (the “Common
Stock”) of Bioverativ Inc., a Delaware Corporation (the “Issuer”).
Capitalized terms contained herein but not otherwise defined shall have the
meanings ascribed to such terms in the Schedule 13D.

The information set forth in response to each separate Item below shall be
deemed to be a response to all Items where such information is relevant. The
Schedule 13D is hereby supplementally amended as follows:

Item 3. Source and Amount of Funds or Other Consideration

The source of funds used for the purchase of the Issuer?s securities and
the Number of Forward Shares was the working capital of ValueAct Master Fund.
The aggregate funds used by these Reporting Persons to make such purchases
were $ 21,137,010.94.

Item 5. Interest in Securities of the Issuer

The responses to Items 3, 4 and 6 of this Schedule 13D are incorporated
herein by reference.

(a) and (b). Set forth below is the beneficial ownership of shares of
Common Stock of the Issuer for each person named in Item 2. Shares reported
as beneficially owned by ValueAct Master Fund are also reported as
beneficially owned by (i) ValueAct Management L.P. as the manager of each
such investment partnership, (ii) ValueAct Management LLC, as General Partner
of ValueAct Management L.P., (iii) ValueAct Holdings, as the sole owner of
the limited partnership interests of ValueAct Management L.P. and the
membership interests of ValueAct Management LLC and as the majority owner of
the membership interests of VA Partners I and (iv) ValueAct Holdings GP, as
General Partner of ValueAct Holdings. Shares reported as beneficially owned
by ValueAct Master Fund are also reported as beneficially owned by VA
Partners I, as General Partner of ValueAct Master Fund. VA Partners I,
ValueAct Management L.P., ValueAct Management LLC, ValueAct Holdings and
ValueAct Holdings GP also, directly or indirectly, may own interests in one
or more than one of the partnerships from time to time. Unless otherwise
indicated below, by reason of such relationship ValueAct Master Fund is
reported as having shared power to vote or to direct the vote, and shared
power to dispose or direct the disposition of, such shares of Common Stock,
with VA Partners I (only with respect to ValueAct Master Fund), ValueAct
Management L.P., ValueAct Management LLC, ValueAct Holdings and ValueAct
Holdings GP.

As of the date hereof, ValueAct Master Fund is the beneficial owner of
8,132,880 shares of Common Stock, representing approximately 7.5% of the
Issuer’s outstanding Common Stock (which shares may also be deemed to be
beneficially owned by VA Partners I).

ValueAct Management L.P., ValueAct Management LLC, ValueAct Holdings
and ValueAct Holdings GP may each be deemed the beneficial owner of an
aggregate of 8,132,880 shares of Common Stock, representing approximately

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Page 9 of 11 – SEC Filing

————————– ————————-
CUSIP NO. 09075E100 Page 9 of 12
—————————————————————————–

7.5% of the Issuer’s outstanding Common Stock. All percentages set forth in
this Schedule 13D are based upon a total of 107,975,968 outstanding shares of
Common Stock (based on disclosure in Biogen Inc.?s Form 4 Statement of
Changes in Beneficial Ownership in the Issuer filed with the SEC on February
1, 2017).

(c) The following description sets forth all transactions with respect
to shares of Common Stock, effected since the most recent filing of Schedule
13D by the Reporting Persons or on behalf of the Reporting Persons, inclusive
of any transactions effected through 4:00 p.m., New York City time, on March
2, 2017. On February 23, 2017, ValueAct Master Fund entered into Forward
Transactions, as previously more fully described in Schedule 13D, in the
notional share amount of 432,880 at the Forward Price of $48.81. On February
28, 2017, ValueAct Master Fund received 6,488,580 shares of Common Stock in
connection with the Physical Settlement of the Forward Transactions.

(d) and (e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer

The responses to Items 3, 4 and 5 of this Schedule 13D are incorporated
herein by reference.

As described in Item 5, the Reporting Persons received 6,488,580 shares
of Common Stock in connection with the Physical Settlement of the Forward
Transactions.

Other than as described in this Report and as previously reported, the
Reporting Persons have no understandings, arrangements, relationships or
contracts relating to the Issuer’s Common Stock which are required to be
described hereunder.

Item 7. Material to Be Filed as Exhibits

(1) Joint Filing Agreement.

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Page 10 of 11 – SEC Filing

————————– ————————-
CUSIP NO. 09075E100 Page 10 of 12
—————————————————————————–
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below on this Schedule 13D hereby constitutes and appoints Jeffrey W. Ubben,
Bradley E. Singer, G. Mason Morfit and Allison Bennington, and each of
them, with full power to act without the other, his or its true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or it and in his or its name, place and stead, in any
and all capacities (until revoked in writing) to sign any and all amendments
to this Schedule 13D, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary fully to all intents and purposes as he or it might
or could do in person, thereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

ValueAct Capital Master Fund L.P., by
VA Partners I, LLC, its General Partner