Loeb Seeks Head Of Pharmaceutical CEO

Jul 17 2007 | 2:05pm ET

Patience is not one of Daniel Loeb’s more prominent virtues: Just a month after meeting with independent directors of PDL BioPharma, Loeb fired off a letter to them complaining of their inaction and demanding—what else?—a firing.

Loeb, founder of the activist New York hedge fund Third Point, wrote, in a letter dated yesterday, “Although we understand that you recently directed your financial and business advisors to explore all options to increase shareholder value, we believe that directive will prove futile so long as Mr. [Mark] McDade remains CEO.” Loeb goes on to demand three seats on the board of the Fremont, Calif.-based pharmaceutical company in addition to McDade’s immediate dismissal.

After a legal—some might say patronizing—discussion of the fiduciary responsibilities of independent directors, to wit, “terminate Mr. McDade before he is allowed to destroy shareholder value at our company for even one more day,” Loeb details six examples of McDade’s alleged “record of incompetence, egregiously bad business judgment and serious ethical lapses.”

Third point controls roughly 9.8% of PDL’s outstanding shares.

In addition to McDade’s head and a trio of board seats, Loeb also calls on the board to “slow the progression of the Ularitide & Nuvion Partnerships until all alternatives are considered.”

Meanwhile, another company target by Third Point is out one long-time executive.

Richmond, Va.-based Massey Energy Co. said today that H. Drexel Short, senior vice president of group operations, had left the firm after more than 25 years. The coal mining company, which faces a slew of legal troubles in addition to Loeb’s wrath, offered no explanation for Short’s resignation.

Last month, Loeb and Third Point analyst Todd Swanson quit the Massey board over—you guessed it—the board’s refusal to fire Massey CEO Don Blankenship.

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