The AFR’s Street Talk column today noted that hedge Fund, Elliott Associates, has quietly departed Orica’s share registry after failing in its attempted merger arbitrage attempt.
As Crikey noted earlier this week, Elliott was reportedly furious at the Orica board for refusing to negotiate with a private equity consortium, led by Bain Capital and Blackstone Group, which made a cash offer of $32 per share for the explosives and chemicals firm.
Elliott Associates was founded in 1977 by former lawyer, Paul Singer and now has more than US$6 billion under management. Singer’s fund, which has returned approximately 14.1% to investors since its inception gained notoriety as an activist shareholder with its 2004 action against Proctor & Gamble.
Elliott took the US consumer product group to task after it attempted to offer Wella management and family shareholders a 42% premium compared with non-voting shareholders. Elliott, which had a stake in non-voting Wella stock intervened and P&G subsequently increased its offer.
Unfortunately for Elliott, their attempted “activism” against Orica, which has been one of Australia’s best performing stocks in recent years, has been far less successful. It is believed that Elliott would have exited its investment in Orica at around $30 per share – below the level of the PE offer.
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