Best Trade Ever - Ackman Scores Big on Longs Drug Stores (LDG)
On August 5th, Ackman's Pershing Square disclosed an 8.8% stake (3,137,659 shares) in the company. Ackman also has 5,296,896 notional shares underlying certain cash-settled total return swaps, bringing his total economic exposure to 8,434,555 shares of Common Stock (approximately 23.6% of the outstanding shares of Common Stock).
Ackman paid $136,609,962 for these positions. The total value of the shares Ackman controls, at the buyout price of $71.50, is worth $603,070,682.
As Ackman just started accumulating shares in late June and July in the $40 range, this is an amazing windfall for Ackman and may go down as one of the 'best trades ever.'
Bill Ackman's Pershing Square hedge fund is a long/short equity fund with an activist bent. Ackman holds large positions in Target (NYSE: TGT) and Borders (NYSE: BGP), among others. Ackman proved his acumen as a short seller in 2007/2008 as short positions he held in MBIA (NYSE: MBI) and Ambac (NYSE: ABK) proved to be big winners due to the credit crunch.