Activist investor Paul Singer has acquired an 8.3 percent take in the health care technology and consulting company Advisory Board. The acquisition was made through Singer’s Elliott Management.
It amounts to an estimated $130 million stake in the company by Elliot Management which has $30 billion in investments.
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Advisory Board laid off 220 employees earlier this month after its stock had plummeted from a high of $69 per share in 2013 to only $36 per share before Paul Singer’s purchase. The company declares that it provides the latest global intelligence and best practices to help you build the health system of the future.
Advisory Board’s stock jumped 16 percent to $42 a share after the news of Paul Singer’s investment broke last week. Analysts say that Singer is banking on health companies becoming more valuable if and when Donald Trump and the Republican Congress repeal the Affordable Care Act more popularly known as Obamacare.
“We are obviously aware of Elliott Management’s 13-D filing and investment in The Advisory Board Company, ” Robert Borchert, the Advisory Board’s vice president for investor relations, told the Washington Post in an email. “As with all of our shareholders, we are always open to discussing constructive ideas for enhancing long-term shareholder value. We remain focused on this endeavor and continue to execute on a number of initiatives, including the refined health-care strategy and restructuring we announced on Jan. 3.”
Richard Close, health care analyst at Canaccord Genuity Inc, told The Street that this was a smart move on Paul Singer’s part since he believes that Advisory board is poised to improve its performance over the past because it has “a significant customer base and are well-respected in the health care industry as a thought leader, trusted partner for health systems.”
That publication also feels that Elliott Management may engage in an activist campaign to get Advisory Board to sell itself. Paul Singer’s fund has engaged in 117 campaigns, including 14 proxy contests since 1994.
