Billionaire hedge-fund manager John Paulson said Vodafone Group Plc (VOD), Kodiak Oil & Gas Corp. (KOG:US) and Pioneer Natural Resources Co. (PXD:US) are potential takeover targets, according to a third-quarter report to investors.
“We believe a stand-alone Vodafone could be an attractive potential acquisition target and offers the opportunity for further upside through a simple rerating or takeover premium,” Paulson & Co. wrote. As of its latest filing, the firm owned 2.8 million American depositary receipts in Vodafone.
Paulson’s $18 billion New York-based firm this year has outperformed funds that seek to profit from corporate mergers, posting a 14 percent gain through September in the Paulson Partners fund, according to a person briefed on the return. Merger-arbitrage hedge funds on average rose 6.1 percent, according to data compiled by Bloomberg. Paulson has benefited from investments including MetroPCS Communications Inc., which merged with Deutsche Telekom AG’s T-Mobile USA unit, and Sprint Corp., which was acquired for $21.6 billion by Softbank Corp.
Kodiak, an independent energy producer focused on the exploration and production of shale oil in the U.S., may be attractive to buyers because of its “modest $3 billion market value” and more than 196,000 acres in the Bakken shale of the Williston Basin in North Dakota, Paulson & Co. said in the report, a copy of which was obtained by Bloomberg News.
“Kodiak could be an attractive takeover candidate as it provides both rapid growth and long life reserves,” the firm wrote. A rerating (KOG:US) of Denver-based Kodiak’s shares is another potential outcome, Paulson & Co. said.
Paulson & Co. owns (KOG:US) 15 million Kodiak shares, or 5.6 percent of the stock, according to data compiled by Bloomberg. Kodiak climbed 5 percent to $13.50 and has risen about 53 percent this year.
Pioneer Natural Resources, the Dallas-based independent oil and gas exploration and production company, has “significant proven reserves and production in low-risk, predictable basins in the U.S.,” Paulson & Co. wrote in the report. “Similar to Kodiak, Pioneer focuses on unconventional oil recovery technologies.”
Paulson & Co. owns 2.44 million shares of Pioneer, or 1.8 percent of the stock, according to data compiled by Bloomberg. Pioneer rose 4.3 percent to $224.95 and has surged 111 percent this year.
Last month, Verizon Communications Inc. agreed to pay $130 million to buy Vodafone’s share of Verizon Wireless, the largest and most profitable U.S. wireless carrier. Newbury, U.K.-based Vodafone ADRs fell 0.9 percent to close at $36.77 in New York, and have risen 46 percent this year.
Armel Leslie, a spokesman for Paulson & Co. at WalekPeppercomm, declined to comment on the report.
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