Elliott Shows Tail Wags Dog in German M&A

(Reuters) The investor who snoozes, loses. But maybe not in Germany. The takeover of drugmaker Stada by buyout firms Bain and Cinven is playing out in a way that suggests sometimes the best thing to do is nothing at all. That sets an unfortunate precedent in corporate dealmaking. When the two private equity groups offered to buy Stada last month for 66.25 euros per share, hedge fund Elliott Management was among the 36 percent of investors that didn’t sell. It now wants a price that’s 12 percent higher, and the buyout firms have agreed, in principle, to play along. Without Elliott’s support, they can’t pass the important 75 percent threshold after which they can tell management what to do, and siphon off its cash flows. In other words, Elliott and other minorities had the buyers over a barrel.

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