Hedge Fund Magnetar Sues McKesson Over Celesio Deal
Hedge Fund Claims a Large Celesio Shareholder Was Paid Higher Price Than Others
Magnetar accuses McKesson of offering a higher price to one large Celesio shareholder, Elliott Management Corp. McKesson officials weren't immediately available to comment. An Elliott official declined to comment on the lawsuit.
Magnetar cites German law requiring all shareholders and bondholders to receive equal treatment in a takeover. "Under German takeover law, minority shareholders are entitled to receive the minimum price paid to all other shareholders," Magnetar said Wednesday.
If the lawsuit is successful it could force San Francisco-based McKesson to pay an additional €370 million to Celesio shareholders and bondholders who have already tendered their holdings.
Earlier this year, an Elliott-managed hedge fund amassed large stakes in Celesio's shares and two of its convertible bonds. It then threatened to block McKesson's bid of €23.50 a share, which valued Celesio at more than €6 billion, including debt.
To win Elliott's consent, McKesson paid it nearly €31 for each convertible bond, the lawsuit claims.
Documents published by McKesson indicate it did pay the equivalent of €31 a share for Elliott's convertible bonds. Other convertible bondholders received the equivalent of €23.50 a share.
"We believe McKesson's actions were specifically aimed at evading the minimum price rule in German takeover law, and resulted in offering only €23.50 per Celesio share to minority shareholders, whilst paying a look-through price of up to €30.95 per Celesio share through the acquisition of convertible bonds," Magnetar said.