Paul Singer’s hardball tactics as a corporate gate-crasher haven’t been paying off lately.
The billionaire boss of Elliott Management has been battling with companies in record numbers — launching campaigns against 22 boards last year.
But the $34 billion hedge fund’s promises don’t always pan out, resulting in high-profile clashes with corporate boards that threaten to make it look like a dirty trickster with no teeth.
Most recently, aluminum parts maker Arconic rejected a push from Elliott to sell itself to private equity firm Apollo for $22.20 a share — far less than the $33-a-share price tag the hedge fund claimed it could get when battling for Arconic board seats in 2017.
In June 2017, a deadly fire killed 72 people at West London’s Grenfell Tower, with Arconic’s aluminum cladding blamed for the fire’s quick spread. Elliott couldn’t have foreseen the disaster, but critics say it has since struggled to properly gauge the liabilities as it pursues a sale.
This week, Arconic thumbed its nose at Elliott by replacing its chief executive, an Elliott ally, with its chairman, John Plant.
The switch comes as Elliott was trying to get the company back to the table with Apollo, insiders say.
As reported by The Post, Plant was the target of a recent prank by suspected Elliott supporters, including investment bank Jefferies, which handed out Plant’s cell number to shareholders in hopes they would give Plant an earful over quashing the Apollo deal.
Elliott did not respond to requests for comment but told Bloomberg that the hedge fund did not speak with Jefferies about Arconic.
Elliott also came up short when it came to health care service provider Athenahealth. After offering to buy the company for $160 a share in May, signaling it expected to be outbid, Elliott and Veritas Capital agreed to buy Athenahealth for just $135 a share in November. That was $10 higher than the next highest bidder, according to sources.
Elliott’s December 2018 deal to buy Travelport for $15.75 a share, together with private equity firm Siris Capital, also fell well short of the “preliminary offer” it made of between $17.50 and $18.50 per share back in April when it was urging the company to explore a sale, regulatory filings show.
Not helping matters is the trail of casualties left in Elliott’s wake. During the hedge fund’s bitter proxy battle with Athenahealth, founder and CEO Jonathan Bush lost his job — and good name — after The Daily Mail reported that Bush, cousin to former President George W. Bush, had confessed to a 2006 physical altercation with his then wife.
Arconic’s ex-CEO, Klaus Kleinfeld, also lost his job after he sent a bizarre letter to Singer that the hedge fund later said it took to be “a threat to intimidate or extort a senior officer.”
Kleinfeld’s April 2017 letter made vague mention of the “great time” Singer had during a 2006 soccer game in Germany, with a reference to singing in a fountain.
The board fired Kleinfeld after it determined the letter, which had Kleinfled claiming to have learned of a “completely ‘other side’” of Singer, was “in poor judgment.”
Critics say that Elliott’s pattern of promising one thing and delivering another threatens to hurt its ability to win board seats in the future.
“This gives boards more ammunition to resist and say look at the track record and let’s scrutinize their motives before we give board seats,” said Douglas Chia of The Governance Center at The Conference Board.