If Achillion Was Going To Be Taken Out At A Big Premium, Baupost Would Probably Own It

16-06-2014 Seeking AlphaComments (0)

AchillionBiotechnologyUSA

Achillion (ACHN) shares have rallied an astounding 165% ($450 million increase in market value) following the news that Idenix (IDIX) would be acquired by Merck (MRK) for nearly $4 billion (a 240% premium to it's share price). Investors seem to expect that not only is a bid for Achillion likely, it is imminent. While it is commonplace for investors to speculatively bid up the price of 'peer' companies following the announced acquisition of a competitor, I believe investors are overlooking a critical piece of information. There is one investor which seemed to know Idenix better than most everybody else. That investor, Baupost (led by famed value investor Seth Klarman), owned a whopping 35% of Idenix. However it is important to note that Baupost is not listed among major shareholders of Achillion (thus if it held/holds any shares, it is sub 5%). Thus while it appears that Baupost was

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