Shareholder Activist Update: Centaurus Capital and Allied Capital Corp
|March 8th, 2010||
|Contributed by: Hedge Fund Solutions LLC|
|On February 8th, Centaurus Capital sent a letter to Allied Capital Corp (NYSE: ALD) claiming that Ares Capital Corporation’s (NASDAQ: ARCC) recent offer to purchase Allied in a $648 million all-stock deal undervalued the business. According to Hedge Fund Solutions, Centaurus Capital advised Allied to further consider Prospect Capital Corporation’s (NASDAQ: PSEC) offer for an all-stock purchase which was previously rejected by the board as the “less superior” offer but is implicitly valued 25% higher than Ares’. |
Centaurus Capital is a hedge fund manager founded in 2000 by Chairman Bernard Oppetit and specializing in event-driven European strategies. Centaurus Capital currently holds 9,510,887 shares of Allied or 5.3% of shares outstanding.
On March 3rd, Allied Capital announced that a special cash dividend of $0.20 per share will be declared when shareholders owning a total of 2/3 of shares outstanding approve of the merger with Ares at the meeting scheduled for March 26th. This will be difficult since about 70% of Allied shareholders are retail holders who do not vote as frequently as institutional holders. Prospect Capital terminated its offer after this announcement but will discuss a potential deal if this merger falters.
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