Wednesday, October 17, 2007

Loeb's Third Point Lowers Stake in PDL BioPharma (PDLI) to 5.1%

In an amended 13D filing on PDL BioPharma, Inc. (Nasdaq: PDLI), Daniel Loeb's Third Point LLC disclosed a 5.1% stake (6,000,000 shares) in the company. This is down from the 9.7% stake (11,300,000 shares) he disclosed in a prior filing.

Third Point sent a letter to the Board of Directors in which it acknowledged positive developments relating to the Company's announced intentions to commence a sale process but expressed concern that the Board does not include a Third Point representative and that the Company is being led by L. Patrick Gage as Interim Chief Executive Officer. In the letter, Third Point reiterated its belief that the shares remain undervalued and stated that, as one of the Company's largest shareholders, it will be carefully tracking developments at the Company and assessing its options.

A Copy of the Letter:

PDL Board Members:

We are encouraged by PDL's October 1st press release announcing that the Board will actively seek the sale of the entire Company or all of its component pieces. We are also pleased with the progress apparently being made by the Merrill Lynch investment bankers in spear heading this process and advancing it expeditiously to a successful conclusion.

Despite these positive developments, we are disappointed that the sale process is still being led by a Board that does not include a Third Point representative, and that Patrick Gage remains the Company's CEO, despite having demonstrated his unsuitability. Accordingly, although we remain convinced that PDLI shares are undervalued, and that a sale will maximize shareholder value, in light of your continuing refusal to provide us with a voice in the Company's affairs through a Board seat, we have reduced our position.

Despite the reduction in our PDLI position, we have maintained a holding above the 13D filing threshold, and remain one of the Company's largest shareholders. We will be carefully watching developments, and assessing our options, as events unfold.

Daniel S. Loeb

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