January 20, 2014 / 6:21 PM / 4 years ago

Hedge fund Elliott raises Celesio stake to 24.08 percent

2 Min Read

FRANKFURT, Jan 20 (Reuters) - Activist investor Elliott Management Corp has raised its stake in German drug distributor Celesio and now controls shares equivalent to 24.08 percent of voting rights, regulatory filings to the Frankfurt Stock Exchange on Monday showed.

New York-based hedge fund Elliott, which previously controlled shares with less than 20 percent voting rights, declined to comment.

Earlier this month Reuters reported market talk that Elliott was adding to its stake after the failure of an $8.4-billion Celesio bid from McKesson Corp.

McKesson had raised its offer for Celesio following pressure from Elliott, Celesio's second-largest shareholder behind Franz Haniel. But the U.S. drugs wholesaler failed to get across a 75 percent threshold for acceptances it had set as a condition.

In the disclosure filing on Monday, Elliott revealed it also holds convertible bonds which give it access to an additional 7.93 percent voting stake, giving the hedge fund a theoretical voting stake of 32.01 percent, according to the document.

Because the convertible bonds do not come due until Oct. 29 this year, and April 7, 2018, Elliott is not immediately obliged to make a mandatory offer to shareholders.

Under German takeover rules, any investor who accumulates a voting stake of above 30 percent must make a mandatory takeover offer to the remaining shareholders.

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