Billionaire Wilbur Ross said his company is paying a fair price for shares in a shipping company held by defunct brokerage Lehman Brothers Inc., after hedge fund Elliott Management Corp. said the price was too low.
Elliott, a creditor of the brokerage, said the 34 percent stake in gas-tanker operator Navigator Holdings Ltd. is being offered to WL Ross & Co. for about $110 million without a proper bidding process. Trustee James Giddens would be letting Ross’s company, which already owns Navigator shares, raise its stake to 61 percent without paying a premium for control, Elliott said yesterday in a bankruptcy court filing in Manhattan.
The fight pits two billionaire investors against each other in the market in distressed industries. Elliott, the $20 billion firm founded by billionaire investor Paul Singer, asked the judge not to let Giddens complete the sale to Ross.
“WLR not only has agreed to pay a full and fair price for the shares following arms’ length negotiations between the trustee and WLR, but WLR, like any other potential purchaser, was required to agree to binding standstill restrictions that preclude it from acquiring or exercising control” for a specified period, the Ross company said in a filing today that was accompanied by a declaration from Ross, the chairman.
Most of Ross’s Navigator shares were bought last year from Navigator for the same $25 each that Lehman would receive, the company said.
Ross, whose company manages about $10 billion of assets, told Bloomberg News this month that private-equity investors are increasingly interested in shipping after a four-year rout caused by a glut of capacity.
Apollo Global Management LLC and Blackstone Group LP are among private-equity firms that bought vessels in the past two years. WL Ross joined other investors who spent $900 million a year ago on 30 tankers hauling refined oil products.
The Lehman brokerage, which is liquidating separately from its parent, Lehman Brothers Holdings Inc., hasn’t paid institutional creditors anything from its $25 billion hoard after four years in liquidation. Elliott demanded in June that Giddens sell securities and pay an initial $3.2 billion soon.
Noting the payment demand, the Ross company said Elliott appears to have an agenda that many of the brokerage’s creditors don’t share.
Peter Truell, an Elliott spokesman, didn’t immediately respond to an e-mail seeking comment on the Ross statement.
The Lehman brokerage liquidation is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The parent’s case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).