Billionaire investor Paulson joins Valeant board, shares jump


Reuters

UPDATE 2-Billionaire investor Paulson joins Valeant board, shares jump


(Adds details on Paulson, history of company, updates share
price)
    By Svea Herbst-BaylissJune 19 (Reuters) - Billionaire investor John Paulson, whose
hedge fund firm is the biggest owner of Valeant Pharmaceuticals
International Inc <VRX.TO><VRX.N> shares, on Monday joined the
ailing drug company's board as it restructures to repay debt.
    Investors appeared to see Paulson's becoming a director as a
vote of confidence in Valeant, sending its U.S.-listed shares up
5.1. percent at $13.29.
    The move comes as Valeant sells off assets to pay down its
$30 billion debt. "With his significant business and financial
expertise, John will be a strong addition to the board," Valeant
Chief Executive Officer Joe Papa said in a statement. "His
experience will be especially valuable as we continue to execute
on our transformational strategy to turnaround Valeant."
    The 61-year old Paulson, best known for a bet against the
overheated housing market that earned his firm $15 billion in
2007, has not served on many corporate boards. He is currently a
director at insurer American International Group Inc <AIG.N>,
which recently removed its CEO.
    A Paulson spokesman declined to comment.
    Paulson & Co, owns 19.4 million shares, or 5.7 percent of
Canada-based Valeant. His firm, like many other hedge funds, has
suffered heavy losses as Valeant's stock price plummeted some 96
percent since mid-2015 after it became embroiled in an
accounting scandal and was investigated for hefty price hikes.
The stock price is still 80 percent off its peak.
    Paulson will be the second investor along with Robert Hale,
a partner at hedge fund firm ValueAct, to sit on the 11-person
board that was overhauled a year ago by activist investor
William Ackman, who was long the company's biggest public
supporter.
    Ackman recruited Papa after firing former CEO Michael
Pearson who grew Valeant into one of the hedge fund industry's
most widely owned companies.
    Paulson will work with Papa and other board members to
narrow Valeant's focus to its dermatology, gastrointestinal and
eye care businesses and sell off other assets. In November talks
to sell Salix, one of its crown jewels, to Japanese company
Takeda <4502.T> fell apart.
    A few months later in March, Ackman abruptly sold his
position and exited the board but not before the Valeant
investment cost his firm, Pershing Square Capital Management,
some $3 billion in losses. [nL3N1GT5VD]
    Valeant has also taken a bite out of Paulson's performance.
His firm's assets, which had $36 billion in assets at its peak
in 2011, have shrunk to roughly $10 billion with Paulson's
personal assets making up the bulk of the capital.
    Last year Paulson Partners Enhanced merger arbitrage fund
tumbled 50 percent before falling further in early 2017.
    Also, a string of employees have been leaving. Most
recently, portfolio manager Sheru Chowdry, who co-managed the
Paulson Credit Opportunities Fund along with Ty Wallach, said he
would leave. [nL1N1J702W]

 (Reporting by Svea Herbst-Bayliss in Boston; Additional
reporting by Yashaswini Swamynathan in Bengaluru; Editing by
Saumyadeb Chakrabarty and Jeffrey Benkoe)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))

Keywords: VALEANT PHARM IN BOARD/ (UPDATE 2)



This article appears in: Politics , Stocks , World Markets
Referenced Symbols: 4502 , AIG , VRX


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