D.E. Shaw either has an impeccable sense of timing, or is engaged in… Well, let’s just say it has an impeccable sense of timing.
The hedge fund manager yesterday reported its acquisition of a 6.6% stake in Alliance Data Systems. At the time, Alliance Data was in the midst of a legal tug-of-war with The Blackstone Group, over whether or not ADS could compel Blackstone to honor an $81.75 per share buyout agreement. Based on the initial reaction of a Delaware judge, it looked grim for ADS, and its shares closed the day at just $51.46 a piece.
That’s the dicey situation D.E. Shaw bought into.
Fast forward to this morning, however, and ADS not only withdrew its lawsuit, but also issued the following explanation: “In light of Blackstone’s confirmation of its commitment to work to consummate the merger, the Company has at this time withdrawn its lawsuit without prejudice.”
The move has sent the stock up more than 6% so far today, even if some of us are still scratching our heads at what’s actually happening between ADS and Blackstone. Maybe we should just ask D.E. Shaw…