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Dan Loeb Wins Big with El Paso Acquisition

October 17, 2011 | About:
Daniel Loeb of Third Point LLC continues to outperform his hedge fund peers. One of Loeb's largest holdings, El Paso (EP), was acquired by Kinder Morgan (KMI) for $21 billion.

The cash and stock offer is valued at $26.87 per El Paso share, or 37% more than the October 14 closing price. For Dan Loeb, it was a gain of $130 million from his purchase price only a few months ago.

Previously, Loeb listed El Paso Corp. as his second top stock. Loeb bought 11 million shares in the first quarter of 2011 at an average price of $16.45 per share.

Interestingly, Loeb's top holding is another potential takeover candidate, Yahoo (NASDAQ:YHOO). Loeb bought a staggering 65,000,000 shares of YHOO last month. Yahoo has reportedly readied itself for sale with interested bidders including Microsoft (NASDAQ:MSFT).

Looking ahead, Third Point still favors gold over all other investments. Gold is his largest position as Loeb wants insurance on a “doomsday” scenario. Loeb has also mentioned that he wanted to protect his portfolio against “fat-tail risk” trades.

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