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Dan Loeb Wins Big with El Paso Acquisition

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Oct 17, 2011
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Daniel Loeb of Third Point LLC continues to outperform his hedge fund peers. One of Loeb's largest holdings, El Paso (EP, Financial), 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 (YHOO, Financial). Loeb bought a staggering 65,000,000 shares of YHOO last month. Yahoo has reportedly readied itself for sale with interested bidders including Microsoft (MSFT, Financial).


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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