Third Point & Mark McDade controversy

Goals

To understand the controversy between Mark McDade as CEO of PDL Biopharma and hedge fund Third Point in 2007. This will help formulate part of a background check being conducted on Mr. McDade. This should include a timeline of the events, concerns raised by Third Point, how they were addressed by Mr. McDade and PDL Biopharma, and how the individual board members responded at the time.

Early Findings

As we dove into background research on this event, we gained several insights on the controversy between Mark McDade and Third Point. Here are some key pieces of information we found:
  • Since this event was around 12 years ago, we found that, understandably, the most relevant sources are outside of Wonder's typical two year timeframe.
  • Beginning on March 5, 2007, Third Point demanded significant changes and cost-cutting in one of its investments, PDL Biopharma.
  • According to several articles, there was some back-and-forth (telephone calls) between the companies, as PDL Biopharma refused to acknowledge there was a problem. Third Point felt the calls were a stalling tactic, as Mr. McDade did not seem to be willing to work constructively with their investor.
  • After around a month, Third Point then publicly demanded Mr. McDade's resignation from the company. They remained optimistic about the company's overall potential with a different leader.
  • Third Point, in May, also sent targeted letters to PDL Biopharma's board members. In a follow-up letter, Third Point stated the board members had yet to respond, so it appears that there were no public statements or reactions from individual board members during the controversy.
  • After individually researching each board member, we discovered there were no statements or interviews giving their opinion of the situation, either from that time period or afterwards.
  • The controversy continued for several more months, with each party escalating their feud for various reasons. Third Point also officially solidified their position via their SEC filing in July. In August, they expanded their demands by also calling for the resignation of the Board Chairman and one more board member.
  • PDL Biopharma's earnings call from the time is available after registering for free on Seeking Alpha. While there are not many public statements from PDL Biopharma from the time, close analysis of the call and other press releases can give some insights into how the company tried to respond (or, often, completely ignored) to Third Point's concerns.
  • Mr. McDade finally announced his resignation on August 19, 2007. The accompanying press release revealed that he had been subjected to an internal investigation, though he was cleared of any wrongdoing.

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