On February 8th, Centaurus Capital sent a letter to Allied Capital Corp (NYSE: ALD) claiming that Ares Capital Corporation’s (NASDAQ: ARCC) recent offer to purchase Allied in a $648 million all-stock deal undervalued the business. According to Hedge Fund Solutions’ Catalyst Research Reports, Centaurus Capital advised Allied to further consider Prospect Capital Corporation’s (NASDAQ: PSEC) offer for an all-stock purchase which was previously rejected by the board as the “less superior” offer but is implicitly valued 25% higher than Ares’.
On March 3rd, Allied Capital announced that a special cash dividend of $0.20 per share will be declared if shareholders owning a total of 2/3 of shares outstanding approve of the merger with Ares Capital at the meeting scheduled for March 26th. This will be difficult since about 70% of Allied shareholders are retail holders who do not vote as frequently as institutional holders. Prospect terminated its offer after this announcement but will discuss a potential deal if this merger falters.
Centaurus Capital currently holds 9,510,887 shares of Allied or 5.3% of shares outstanding. Centaurus Capital is a deep value hedge fund manager that specializes in event-driven European strategies. The firm was founded in 2000 by Chairman Bernard Oppetit and Chief Investment Officer Randel Howard Freeman. |
