Friday, December 03, 2004

Return (eh.. control) without risk !

An interesting article in the NewYorkTimes today. An interesting tactic has been employed in a recent takeover where a hedge fund obtained controlling stake without holding any economic stake in the company. Apparently Perry Corp, a hedge fund having a controlling stake in King Pharma which was subject to a takeover bid by Mylan Labs has obtained controlling stake in Mylan by means of a complex swap transaction with Bear Sterns and Goldman Sachs. They seem to have bought the shares while making GS and BS to sell the same stake short - and removing risk for both parties through a swap. Cool eh :D

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