Billionaire investor Paulson joins Valeant board, shares jump
By Svea Herbst-Bayliss
(Reuters) - Billionaire investor John Paulson, whose hedge fund firm is the biggest owner of Valeant Pharmaceuticals International Inc (VRX.TO: Quote)(VRX.N: Quote) 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: Quote), 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. Continued...