Just Call Him Private Equity Paul Singer

Paul Singer may not seem particularly flexible. Decade-long battles with sovereign states tend to give people an impression of stubborn obstinacy, even to the point of pig-headedness.

In truth, the Elliott Management chief has always been pragmatically open-minded: If he’s not able to fire you in his usual way, he’ll just buy the company and hand-deliver the pink-slips himself.

The situation simmered for more than a year. Eventually, Elliott’s thinking shifted. If Athena didn’t want to implement the firm’s plans, then Elliott would try to implement those plans itself.

Elliott submitted a formal takeover offer in May 2018. A month later, [Athena CEO Jonathan] Bush stepped down from Athena after Bloomberg published a story detailing past domestic violence allegations and newer accusations of workplace misconduct. Athena’s stock continued to flounder, and its shareholders opted to side with Elliott. A deal was reached by November, when Elliott teamed up with private equity firm Veritas Capital to buy Athena for $5.7 billion.

Huh. Wonder where Bloomberg got that information. Anyway, however bad it was for Bush, the pivot to private equity is working out rather swimmingly for Elliott.

Last week, after just three years of ownership, Elliott and Veritas closed the sale of Athena for $17 billion. Elliott’s profit is estimated to be about $5 billion—a lucrative exit that serves as a testament to the benefits of private equity and Elliott’s turnaround chops….

Elliott first invested in Citrix in 2015 and held a stake for five years before it ever attempted a buyout, and the firm owned a slice of Athena for nearly two years before closing its takeover in 2019. That yearslong relationship allows Elliott to learn more about potential targets than would be possible in normal diligence.

It also allows the firm to identify off-the-radar targets. Neither Citrix nor Athena had engaged any formal sale process when Elliott first made its approach.

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