Hedge fund giants are piling into a pharma company that is a target in a $36 billion takeover battle
Texan hedge fund manager J. Kyle Bass of Hayman Capital Management had 836,593 shares of Perrigo at the end of the second quarter, according to the fund's 13-F filing.
Business Insider reported back in May that Bass had snapped up a large long position in Perrigo, a manufacturer of store-brand OTC products, generic prescriptions, and store-brand baby formula.
Bass also purchased a stake in Mylan in the second quarter. The fund last held 780,251 shares, the filing shows.
Hedge fund billionaire John Paulson has also taken a stake in Perrigo, according to Dow Jones. Paulson's Perrigo stake was not in his second quarter 13-F. These regulatory filings don't come out until 45 days after the end of the quarter, so it is possible that he amassed the stake in that time period.
Paulson also has a position in Mylan. His fund's 13F shows that he last held more than 14 million shares of Mylan at the end of the second quarter.
Mylan has proposed a $36 billion cash-and-stock bid, or $232 per share, an offer Perrigo has called "value destructive." The deal hangs in the balance, with The Wall Street Journal's Liz Hoffman reporting on Friday that Institutional Shareholder Services has recommended Mylan shareholders vote against authorizing the takeover.
Hedge funds that bet on mergers and acquisitions have enjoyed some success investing in healthcare companies so far this year. Philippe Ferreira, senior cross-asset strategist at Lyxor Asset Management, recently told The Wall Street Journal's Stefanie Eschenbacher that the sector had contributed about 60% of event-driven hedge funds' gains this year.
Shares of Perrigo were trading up more than 1% on Friday, or around $2.10, at around $194.60 per share.