John Paulson has a problem: He took a huge bath when AbbVie decided not to buy Shire because, even though it was ready to pay $54 billion for the company, the Irish pharma was basically just a tax shelter to Shire, and of the sort that is no longer kosher in the precincts of the U.S. Treasury Department. Now, John Paulson is Shire’s third-largest shareholder, and 30% drops in a company in which one is the third-largest shareholder are the kind of thing likely to produce something approaching panic in a hedge-fund manager.
John Paulson also owns a lot of Allergan shares. You may have heard of Allergan, either because it makes Botox, or because Bill Ackman talks about it a lot.
John Paulson has been listening closely to what Bill Ackman says about Allergan, which is that the company should take Valeant Pharmaceuticals $53 billion (or more?) offer and that if it doesn’t, he's going to throw out its entire board and make Allergan take the deal. And John Paulson likes that plan. He likes it a lot. But he’d like it even more if all of those Shire shares he owns would one day be worth as much as they were when he bought them, all of those months ago, when tax inversions were the order of the day. And he has an idea on that front...
...one that may cause headaches for the staff over at Marea.
Allergan Inc shareholder Paulson & Co is urging the Botox maker to merge with specialty pharmaceutical company Shire Plc as an alternative to a deal with hostile bidder Valeant Pharmaceuticals International Inc, according to two people familiar with the matter.
The hedge fund, which earlier supported a deal with Valeant, told Allergan CEO David Pyott that it would now support a deal with Shire, the sources said.
Top Allergan holder Paulson urges deal with Shire: sources [Reuters]
Paulson Urges Allergan/Shire Tie-Up [WSJ MoneyBeat]