PetSmart Draws Big Bets from Several Hedge Fund Giants
PetSmart Inc., the largest specialty pet retailer of services and solutions for the lifetime needs of pets, has drawn big bets from several well-known hedge funds including Fortress Investment Group LLC and Daniel Loeb’s Third Point LLC.
A hedge-fund investing strategy aimed at squeezing more money from corporate takeovers has its biggest test yet: PetSmart Inc.
The
specialty retailer’s recent $8.25 billion buyout has drawn big bets
from several well-known hedge funds, which bought shares on the brink of
the deal’s closing in March and are laying the groundwork for a court
battle over the $83-a-share buyout price, according to filings and
people familiar with the matter.
The
funds, including Fortress Investment Group LLC and Daniel Loeb’s Third
Point LLC, plan to avail themselves of a legal remedy known as
“appraisal,” in which a judge determines the fair value of the stock.
Little used until about a year ago, the strategy has surged in
popularity, attracting ever-larger wagers from hedge funds hungry for
returns. These funds typically buy shares just before a deal closes with
the intention of seeking more in court.
Source: Wall Street Journal
