Singer Builds Celesio Stake as McKesson Plans Acquisition

Billionaire Paul Singer almost doubled his stake in Celesio AG in the past week in a sign he may try to extract a higher price for his holding as McKesson Corp. seeks to acquire the German drug distributor.

The hedge-fund manager’s New York-based Elliott Management Corp. holds 21.13 percent of the voting rights in Stuttgart-based Celesio, of which 5.44 percent are convertible bonds, the company said in a statement today.

Elliott held just over 11 percent in Celesio last week. The firm became the largest shareholder in Kabel Deutschland Holding AG this year when the cable operator was the subject of a 7.7 billion-euro ($10.4 billion) takeover offer from Vodafone Group Plc. Elliott also tried unsuccessfully to oust board members of Actelion Ltd. in 2011, partly to push the Swiss drugmaker into considering a sale.

McKesson, the largest U.S. pharmaceutical distributor, announced plans on Oct. 24 for a 3.9 billion-euro purchase for Celesio, with the deal subject to acceptance of shareholders owning 75 percent of the German company’s stock.

Under the sales agreement, San Francisco-based McKesson will acquire the 50.01 percent stake held by the founding family’s Franz Haniel & Cie GmbH investment company for 23 euros a share, and begin a tender offer for the remaining publicly traded shares at the same price.

Celesio rose as much as 0.4 percent and was trading up 0.2 percent at 23.25 euros at 4:39 p.m. in Frankfurt.

German takeover rules allow investors to refuse to sell during a takeover attempt and to ask for a higher price, leaving a court to decide on the stock’s value. Rainer Berghausen, a Celesio spokesman, wasn’t immediately available for comment. Stephen Spruiell, a spokesman for Elliott Management, said he couldn’t immediately comment.