Paulson & Co. Opens Positions in Covidien, DirecTV and Allergan

   By Maria Armental 
 

Paulson & Co. has taken new positions in Covidien PLC (COV) and DirecTV and sold off holdings in American Airlines Group Inc. (AAL), General Motors Co. (GM) and Hess Corp. (HES) in the second quarter, according to a securities filing Thursday.

The largest change in the period was in Cobalt.

The hedge fund, which historically specialized in merger arbitrage, also initiated a 5,295,300-share stake in Telecom Italia SpA's (TIT.MI) TIM Participacoes SA (TIMP3.BR) worth $153.7 million. On Wednesday, the Italian company confirmed it is considering merging its Brazilian telecom unit with Vivendi SA's (VIV.FR) GTV SA unit to counter a bid for GVT from Spain's Telefonica SA (TEF.MC).

The firm, founded by billionaire investor John Paulson, also reported a 5,602,000-share stake in Allergan Inc. (AGN), worth $947.97 million. Meanwhile, Paulson--which supports Valeant Pharmaceuticals International Inc.'s (VRX) hostile takeover for the Botox maker--cut its stake in Valeant to 500,300 shares.

The hedge fund also increased its holdings in rival discount chains Family Dollar Stores Inc. (FDO) and Dollar General Corp. (DG). Family Dollar agreed last month to sell itself to Dollar Tree for about $8.5 billion. Paulson, which had sent a letter to Family Dollar in January urging the company to sell itself, bought an additional 1,550,000 shares, bringing its stake to 8,020,000 or $530.4 million. It also more than doubled its holdings in Dollar General, buying an additional 2,090,000 for a total stake worth $234.6 million.

While in the previous quarter Paulson had cut its stake in Mallinckrodt PLC (MNK), the hedge fund reported an increase of 1,088,000 shares for a total state in the specialty pharmaceuticals company worth $538.1 million.

Paulson also increased its holdings in Shire PLC to 3,366,539 shares, or $792.8 million, and Vanda Pharmaceuticals Inc. (VNDA) to 3,200,000 or $51.8 million, and opened a position in Questcor Pharmaceuticals Inc. (QCOR) of 2,248,913 shares worth $208 million.

The firm also opened a position in Covidien--which has struck a deal to sell itself to Medtronic Inc. (MDT)-- and in DirecTV, which has agreed to be bought by AT&T Inc. (T). It bought 7,000,000 worth $631.3 million in Covidien and 10,000,000, worth $850.1 million, in DirecTV.

Paulson has been one of the most bullish investors in gold, but his firm made no change in the size of its holdings in the gold exchange-traded fund SPDR Gold Trust (GLD). Its value grew 3.6% in the quarter to $1.31 billion.

The positions were revealed in a 13F filing with the Securities and Exchange Commission, a quarterly requirement for investors managing more than $100 million. The report indicates the number of shares held and the value of each stake at the end of the quarter.

Write to Maria Armental at [e-mail]

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