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The Morning Brief: John Paulson to Join Valeant Board

News that the fund manager is joining the embattled drug maker’s board sent the shares surging on Monday.

Investors cheered the news that hedge fund manager John Paulson of Paulson & Co. is joining the board of directors of Valeant Pharmaceuticals International. Shares of the embattled drug company surged 6.4 percent on Monday, to $13.47.

“We are pleased to welcome John to Valeant’s board of directors,” said Joseph Papa, chairman and CEO of Valeant, in a statement. “With his significant business and financial expertise, John will be a strong addition to the board. His experience will be especially valuable as we continue to execute on our transformational strategy to turnaround Valeant.”

Paulson is now the company’s largest shareholder. The stock is still down more than 7 percent for the year.


Corvex Management boosted its stake in CenturyLink to 5.6 percent after a legal waiting period expired. In a regulatory filing, the activist hedge fund firm headed by Keith Meister said on June 16 it acquired more than 15.27 million shares in the telecommunications company from exercising equity forward purchase contracts. It also acquired another 1 million shares for $25.91 per share. Corvex said in its filing it plans to review its investment, buy more shares, or take some sort of unspecified action.


Engaged Capital continues to turn up the heat on Rent-A-Center, even though earlier this month shareholders elected its three nominees to the board of directors. The activist hedge fund firm fired off a letter to the remaining directors raising “great concern” that the incumbents “appear committed to maintaining the status quo and ignoring the will” of shareholders.

It expressed disapproval of the company’s “continued delay in onboarding” its three recently elected directors. It also warned the incumbents not to establish an executive committee to conduct business without the activist’s three nominees “or taking any other action to ostracize them.” It warned the incumbents to begin working with the newly elected directors, adding it is “fully prepared to utilize all tools at its disposal to protect stockholder value.” Engaged is the largest shareholder of the company, which rents furniture, computers, electronics, and other items.

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