Paulson & Co. Buys Allergan Stake, Cut Valeant in Quarter

Aug 14, 2014 5:32 pm ET

(Updates with SPDR Gold Trust stake in fifth paragraph.)

Aug. 14 (Bloomberg) -- Paulson & Co., the $22.8 billion hedge-fund firm run by John Paulson, bought a stake in Allergan Inc. during the second quarter, as the pharmaceutical company was targeted for a takeover.

The New York-based firm 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 today. Paulson & Co. reduced its stake in Valeant Pharmaceuticals International Inc. by about 500,000 shares.

Allergan is the subject of a joint hostile bid by Valeant and Bill Ackman’s Pershing Square Capital Management LP, which said today 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.

Paulson & Co. 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, the Dublin, Ireland-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.

American Airlines

The firm sold its positions in American Airlines Group Inc., Pioneer Natural Resources Co., Hess Corp. 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 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.

--With assistance from Debarati Roy in New York.