Filing Details

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 1)¹

PDL BioPharma, Inc.

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

69329Y104

(CUSIP Number)

ANDREW FREEDMAN, ESQ.

RYAN NEBEL, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

February 27, 2020

(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 § 240.13d-7 for other parties to whom copies are to be sent.

 

 

1              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.

The 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).

	1		NAME OF REPORTING PERSON
				ENGINE CAPITAL, L.P.
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							3,969,421
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							3,969,421
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				3,969,421
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				3.5%
	14		TYPE OF REPORTING PERSON
				PN

  

1

NAME OF REPORTING PERSON

ENGINE JET CAPITAL, L.P.

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ☐

(b) ☐

3

SEC USE ONLY

4

SOURCE OF FUNDS

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

DELAWARE

NUMBER OF

7

SOLE VOTING POWER

SHARES

BENEFICIALLY

874,998

OWNED BY

8

SHARED VOTING POWER

EACH

REPORTING

- 0 -

PERSON WITH

9

SOLE DISPOSITIVE POWER

874,998

10

SHARED DISPOSITIVE POWER

- 0 -

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

874,998

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

☐

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

Less than 1%

14

TYPE OF REPORTING PERSON

PN

  

 

	1		NAME OF REPORTING PERSON
				ENGINE AIRFLOW CAPITAL, L.P.
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							1,381,424
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							1,381,424
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,381,424
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				1.2%
	14		TYPE OF REPORTING PERSON
				PN

  

 

	1		NAME OF REPORTING PERSON
				ENGINE CAPITAL MANAGEMENT, LP
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							6,225,843
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							6,225,843
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				6,225,843
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.5%
	14		TYPE OF REPORTING PERSON
				PN

  

 

	1		NAME OF REPORTING PERSON
				ENGINE CAPITAL MANAGEMENT GP, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							6,225,843
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							6,225,843
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				6,225,843
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.5%
	14		TYPE OF REPORTING PERSON
				OO

  

 

	1		NAME OF REPORTING PERSON
				ENGINE INVESTMENTS, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							4,844,419
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							4,844,419
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				4,844,419
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				4.2%
	14		TYPE OF REPORTING PERSON
				OO

  

 

	1		NAME OF REPORTING PERSON
				ENGINE INVESTMENTS II, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							1,381,424
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							1,381,424
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,381,424
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				1.2%
	14		TYPE OF REPORTING PERSON
				OO

  

 

	1		NAME OF REPORTING PERSON
				ARNAUD AJDLER
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				OO
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				BELGIUM
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							6,225,843
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							6,225,843
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				6,225,843
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.5%
	14		TYPE OF REPORTING PERSON
				IN

  

The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”). This Amendment No. 1 amends the Schedule 13D as specifically set forth herein.

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated to read as follows:

The Shares purchased by each of Engine Capital, Engine Jet and Engine Airflow were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business). The aggregate purchase price of the 3,969,421 Shares beneficially owned by Engine Capital is approximately $9,493,016, including brokerage commissions. The aggregate purchase price of the 874,998 Shares beneficially owned by Engine Jet is approximately $2,091,054, including brokerage commissions. The aggregate purchase price of the 1,381,424 Shares beneficially owned by Engine Airflow is approximately $3,333,801, including brokerage commissions.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On February 27, 2020, Engine Capital and certain of its affiliates (collectively, “Engine”) entered into a Cooperation and Support Agreement (the “Cooperation Agreement”) with the Issuer. Pursuant to the Cooperation Agreement, the Issuer increased the size of the Board of Directors (the “Board”) by one member and appointed Alan Bazaar as a Class III director with a term expiring at the Issuer’s 2022 annual meeting of stockholders. Mr. Bazaar was also appointed as Chairman of the newly-formed Cost Management Committee of the Board intended to oversee cost reduction initiatives. The Issuer has also agreed to present a proposal to declassify the Board at the 2020 annual meeting of stockholders (the “2020 Annual Meeting”). Following the 2020 Annual Meeting, Mr. Bazaar will be appointed to the Compensation Committee of the Board, and the size of the Board will be reduced to seven directors.

Pursuant to the Cooperation Agreement, Engine is subject to certain customary standstill restrictions from the date of the Cooperation Agreement until the earlier of (x) 30 days prior to the Issuer’s advance notice deadline for stockholder nominations of directors for the 2021 annual meeting of stockholders and (y) 120 days prior to the first anniversary of the 2020 Annual Meeting (the “Standstill Period”). During the Standstill Period, Engine also agreed to vote its Shares (a) in favor of the slate of directors recommended by the Board, (b) against the removal of any of the Issuer’s directors and (c) in accordance with the Board’s recommendation with respect to any other matter brought to a vote of the Issuer’s stockholders; provided, however, that in the event that Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis & Co., LLC (“Glass Lewis”) recommend otherwise with respect to any proposals (other than the election or removal of directors), Engine shall be permitted to vote in accordance with ISS’s and Glass Lewis’ recommendation; provided, further, that Engine shall be permitted to vote in its sole discretion with respect to any publicly announced proposals relating to a merger, acquisition, disposition of all or substantially all of the assets of the Issuer or other similar business combination transaction. During the Standstill Period, Engine also agreed not to acquire beneficial ownership of, or economic exposure to, more than 9.9% of the outstanding Shares in the aggregate.

The foregoing description of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the Cooperation Agreement, which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 5.

Interest in Securities of the Issuer.

Items 5(a) – (c) are hereby amended and restated to read as follows:

The aggregate percentage of Shares reported owned by each person named herein is based upon 114,184,610 Shares outstanding as of October 31, 2019, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2019.

A.

Engine Capital

(a)

As of the date hereof, Engine Capital directly owned 3,969,421 Shares.

Percentage: Approximately 3.5%

(b)

1. Sole power to vote or direct vote: 3,969,421 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 3,969,421 4. Shared power to dispose or direct the disposition: 0

B.

Engine Jet

(a)

As of the date hereof, Engine Jet directly owned 874,998 Shares.

Percentage: Less than 1%

(b)

1. Sole power to vote or direct vote: 874,998 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 874,998 4. Shared power to dispose or direct the disposition: 0

C.

Engine Airflow

(a)

As of the date hereof, Engine Capital directly owned 1,381,424 Shares.

Percentage: Approximately 1.2%

(b)

1. Sole power to vote or direct vote: 1,381,424 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,381,424 4. Shared power to dispose or direct the disposition: 0

D.

Engine Management

(a)

Engine Management, as the investment manager of each of Engine Capital, Engine Jet and Engine Airflow, may be deemed to beneficially own the 6,225,843 Shares owned in the aggregate by Engine Capital, Engine Jet and Engine Airflow.

Percentage: Approximately 5.5%

(b)

1. Sole power to vote or direct vote: 6,225,843 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 6,225,843 4. Shared power to dispose or direct the disposition: 0

E.

Engine GP

(a)

Engine GP, as the general partner of Engine Management, may be deemed to beneficially own the 6,225,843 Shares owned in the aggregate by Engine Capital, Engine Jet and Engine Airflow.

Percentage: Approximately 5.5%

(b)

1. Sole power to vote or direct vote: 6,225,843 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 6,225,843 4. Shared power to dispose or direct the disposition: 0

F.

Engine Investments

(a)

Engine Investments, as the general partner of each of Engine Capital and Engine Jet, may be deemed to beneficially own the 4,844,419 Shares owned in the aggregate by Engine Capital and Engine Jet.

Percentage: Approximately 4.2%

(b)

1. Sole power to vote or direct vote: 4,844,419 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 4,844,419 4. Shared power to dispose or direct the disposition: 0

G.

Engine Investments II

(a)

Engine Investments II, as the general partner of Engine Airflow may be deemed to beneficially own the 1,381,424 Shares owned by Engine Airflow.

Percentage: Approximately 1.2%

(b)

1. Sole power to vote or direct vote: 1,381,424 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,381,424 4. Shared power to dispose or direct the disposition: 0

H.

Arnaud Ajdler

(a)

Mr. Ajdler, as the managing partner of Engine Management and the managing member of each of Engine GP, Engine Investments and Engine Investments II, may be deemed to beneficially own the 6,225,843 Shares owned in the aggregate by Engine Capital, Engine Jet and Engine Airflow.

Percentage: Approximately 5.5%

(b)

1. Sole power to vote or direct vote: 6,225,843 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 6,225,843 4. Shared power to dispose or direct the disposition: 0

Each Reporting Person may be deemed to be a member of a “group” with the other Reporting Persons for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such group may be deemed the beneficial owner of the Shares directly owned by each of the Reporting Persons. The filing of this Amendment No. 1 to the Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities of the Issuer that he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he or it does not directly own.

(c)

The transactions in the Shares by the Reporting Persons during the past sixty days are set forth in Schedule A and are incorporated herein by reference. Such transactions were effected in the open market.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended to add the following:

On February 27, 2020, Engine and the Issuer entered into the Cooperation Agreement as defined and described in Item 4 above and attached as Exhibit 99.1 hereto.

Item 7.

Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibit:

99.1

Cooperation Agreement, dated February 27, 2020.

 

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: February 28, 2020

 

	Engine Capital, L.P.
	By: Engine Investments, LLC,        General Partner
	By:	/s/ Arnaud Ajdler
		Name:	Arnaud Ajdler
		Title:	Managing Member

 

 

	Engine Jet Capital, L.P.
	By: Engine Investments, LLC,        General Partner
	By:	/s/ Arnaud Ajdler
		Name:	Arnaud Ajdler
		Title:	Managing Member

 

 

	Engine Airflow Capital, L.P.
	By: Engine Investments II, LLC,        General Partner
	By:	/s/ Arnaud Ajdler
		Name:	Arnaud Ajdler
		Title:	Managing Member

 

 

	Engine Capital Management, LP
	By: Engine Capital Management GP, LLC,        General Partner
	By:	/s/ Arnaud Ajdler
		Name:	Arnaud Ajdler
		Title:	Managing Member

 

 

	Engine Capital Management GP, LLC
	By:	/s/ Arnaud Ajdler
		Name:	Arnaud Ajdler
		Title:	Managing Member

 

 

	Engine Investments, LLC
	By:	/s/ Arnaud Ajdler
		Name:	Arnaud Ajdler
		Title:	Managing Member

 

 

	Engine Investments II, LLC
	By:	/s/ Arnaud Ajdler
		Name:	Arnaud Ajdler
		Title:	Managing Member

 

 

	/s/ Arnaud Ajdler
	ARNAUD AJDLER

 

SCHEDULE A

Transactions in the Shares During the Past Sixty Days

Nature of Transaction

Securities Purchased/(Sold)

Price Per Share($)

Date of Purchase/Sale

 

ENGINE Capital, L.P.

Purchase of Common Stock	20,000	3.3090	01/15/2020
Purchase of Common Stock	7,413	3.2936	01/15/2020