Hedge fund Elliott pushes McKesson to hike Celesio offer -source

FRANKFURT Tue Dec 10, 2013 7:57am EST

FRANKFURT Dec 10 (Reuters) - Hedge fund Elliott International is pushing U.S. drugs wholesale group McKesson to hike its $8.3 billion offer for German peer Celesio , a source close to the investor said.

McKesson's offer undervalues Celesio in Elliott's eyes, the person added.

Elliott, run by U.S. investor Paul E. Singer, has spent roughly 800 million euros building a stake of more than 20 percent in Celesio over recent weeks and is now in a position where it can block the takeover.

McKesson has said its 23 euro ($31.55) per share takeover offer is conditional upon it obtaining at least 75 percent of Celesio's shares, including those from the convertible bonds.

One alternative to the McKesson deal would be to sell the wholesale business to a strategic bidder and the pharmacy business to a separate buyer, the source said.

Elliott declined to comment.

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