Ariad Pharma CEO ‘Retires’ in Settlement With Activist Hedge Fund (The Street)
Ariad Pharmaceuticals founder and CEO Harvey Berger is exiting the struggling cancer drug company in a settlement with Sarissa Capital, the activist hedge fund led by Alex Denner, the company said Wednesday. Denner’s fund, which owns almost 7% of Ariad, started a proxy fight last February to wrest control of the board and force Berger’s ouster. Ariad shares tumbled in 2013 because safety problems tied to the company’s leukemia drug Iclusig led to restrictions on its use and cut into sales growth significantly.
Vulture Circles Indebted Tech Companies (CNBC)
Silicon Valley may still be chasing the proverbial unicorns of technology, but at least one big Wall Street investor is thinking more like a vulture. Steve Tananbaum, a leading investor in the bonds of troubled companies, said the technology arena is one of the most interesting opportunities in the market today, given the high debt load carried by mediocre companies. “One sector that hasn’t gotten as much attention in the press but we think is very vulnerable is the technology sector,” the chief investment officer of $23 billion GoldenTree Asset Management said Tuesday at the Milken Institute Global Conference in Los Angeles.
Ackman Activism Deja Vu Evoked as Railroad Options Surge (Bloomberg)
Bullish options on railroad stocks including CSX Corp. have surged amid speculation that an activist investor is building a stake in one of the companies. CSX’s stock jumped 11 percent last week as trading volume ballooned to more than double the five-year average. To UBS AG analyst Thomas Wadewitz, the trading was reminiscent of what occurred with Canadian Pacific Railway Ltd. when billionaire hedge-fund manager William Ackman was buying shares prior to a proxy fight that led to a boardroom coup.
Mayer Brown’s Brian Nolan On Strategy Behind Drug Patent Challenges (Reuters)
Prominent hedge fund manager Kyle Bass‘ threat last January to knock out big pharmaceutical companies’ patents has not proved idle. In recent months, his Coalition for Affordable Drugs has filed petitions for inter partes review of nine drug patents at the U.S. Patent and Trademark Office. The review process was part of a series of reforms brought about by the 2011 America Invents Act, making it faster and easier to challenge patent validity outside of federal courts, and allowing petitions by third parties.
Omega Advisors Bets on Dow Chemical (The Wall Street Journal)
Omega Advisors bought into Dow Chemical Co. in the first quarter and said it believed the stock price was worth $75 a share, according to an April 17 letter to investors. Dow’s recent moves to cut costs, sell off assets and buy back stock “should drive earnings, cash flow and the stock price meaningfully higher,” the New York hedge fund wrote in the letter. Last year the chemicals company faced calls from hedge-fund manager Daniel Loeb to break up. Dow and Mr. Loeb’s Third Point settled a looming proxy fight last November, with Dow adding four directors to its board, including two proposed by Third Point. Dow shares closed Monday at $51.47.
Bernanke To Serve As Senior Advisor PIMCO (CNBC)
Former Federal Reserve Chairman Ben Bernanke will serve as a senior adviser at global investment firm Pacific Investment Management Co. Bernanke served two terms as Federal Reserve Chairman, from 2006 through 2014. He oversaw the federal government’s response to the 2008 financial crisis. Earlier in April, Bernanke joined hedge fund Citadel LLC as a senior advisor.
Economic Club of New York President Hopkins to Leave at Year-End (Bloomberg)
Economic Club of New York President Jan Hopkins, whose tenure featured talks by President George W. Bush and Federal Reserve Chair Janet Yellen, will step down at the end of this year. The Economic Club, founded in 1907, is a non-partisan group that hosts heads of state, chief executive officers and economists for speeches to its members. Its current chairman is Federal Reserve Bank of New York President William C. Dudley and trustees include hedge-fund manager John Paulson and billionaire David Koch.
Hedge Fund Elliott Not Seeking Board Seat At DMG Mori Seiki (Reuters)
Hedge fund Elliott, which holds a 15 percent stake in German machine-tool maker DMG Mori Seiki AG, is not seeking a seat on the supervisory board, DMG said on Tuesday, contrasting with the activist fund’s strategy for some of its other investments. However, Elliott would probably make a suggestion if asked to nominate a board member, a person familiar with the hedge fund’s thinking said. Japan’s DMG Mori Seiki Co Ltd has recently acquired a 52.5 percent stake in DMG Mori Seiki AG, and Elliott built its stake during the tender offer process.
Tax Hit in France And Hedge Funds Weigh On Carlyle (The New York Times)
The Carlyle Group reported a weaker first quarter on Wednesday, hurt by a bigger-than-expected tax bill in France and weighed down by its hedge fund portfolio. Carlyle, the Washington-based private equity giant, said on Wednesday that its economic net income, a metric that includes unrealized gains or losses, was $273 million, representing a decline of 15 percent, compared with $322 million in the period a year earlier.
