John Paulson bet almost $1 billion on fellow hedge-fund manager Bill Ackman and Valeant Pharmaceuticals International Inc. (VRX)’s hostile bid for Allergan Inc. (AGN) during the second quarter, a takeover that’s attracting regulatory scrutiny.
Paulson & Co. acquired 5.6 million shares of Allergan valued at $948 million as of June 30, according to a filing with the U.S. Securities and Exchange Commission yesterday, making the firm the ninth-biggest holder. Paulson & Co. reduced its stake in Valeant by about 500,000 shares.
Allergan is the subject of a bid by Valeant and Ackman’s Pershing Square Capital Management LP, which said yesterday it welcomes a review by the U.S. Securities and Exchange Commission of its takeover tactics and that it did nothing wrong. Allergan, which has refused talks with Valeant, sued on Aug. 1, claiming the drugmaker colluded with Pershing Square to profit from trades ahead of the bid’s announcement, using its insider knowledge of the impending offer.
Pershing Square is the largest shareholder in Allergan, with a 9.4 percent stake. The hedge-fund firm began buying stock in the anti-wrinkle drugmaker in February, then started purchasing over-the-counter call options in March.
Allergan shares rose 2.8 percent to $160 at 10:04 a.m. in New York trading. The shares have advanced 44 percent this year.
T. Rowe, Och-Ziff
Paulson & Co. joined investment firms including T. Rowe Price Group Inc. and Och-Ziff Capital Management Group LLC in buying Allergan shares in the quarter.
T. Rowe, the mutual-fund firm that has taken activist positions in recent years, more than doubled its Allergan stake during the quarter to 15.9 million shares valued at $2.7 billion, as of June 30. The Baltimore-based money manager oversees about $738 billion.
Paulson & Co., which oversees $22.8 billion, also took a stake worth $850.1 million in DirecTV, the satellite-TV provider that AT&T Inc. plans to acquire for about $48.5 billion, and a $631.3 million position in Covidien Plc (COV), the Dublin-based firm that is among the companies considering moving its legal address overseas to lower tax bills. Its fifth biggest new position was in Questcor Pharmaceuticals Inc.
The firm sold its positions in American Airlines Group Inc. (AAL), Pioneer Natural Resources Co. (PXD), Hess Corp. (HES) and General Motors Co. Paulson & Co. maintained its holding in the biggest exchange-traded product backed by gold as prices rose on increasing demand for a haven. The hedge fund is the largest investor in the SPDR Gold Trust (GLD) and kept its stake at 10.23 million as of June 30.
Armel Leslie, a spokesman for Paulson & Co. at WalekPeppercomm, declined to comment.
Money managers who oversee more than $100 million in equities must file a Form 13F within 45 days of each quarter’s end to list their U.S.-traded stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.
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