Christmas Comes Early for Elliott With $450 Million Rocket Internet Gain

(Bloomberg) -- Elliott Management Corp. stands to walk away with a gain of about 400 million euros ($450 million) from a yearlong investment in Rocket Internet SE after successfully squeezing a higher price from the founders who want to take the German startup incubator private.

The activist fund first took a stake of about 15% in Rocket in December last year, shortly after the Samwer brothers announced their plan to delist the Berlin-based company. Today, the two sides agreed on the terms of their separation, which hands Elliott the tidy windfall, according to people familiar with the negotiations. 

That’s because Rocket agreed to tender 27.7 million of its own stock at 35 euros ($39.53) a share, which is almost double the 18.57 euros originally proposed by the Samwers two months before Elliott appeared on the scene. 

While Elliott declined to comment on its gains, portfolio manager Nabeel Bhanji said the fund “welcomes Rocket Internet’s actions today” and that the fund is pleased to see the increase in value of the company’s assets. Rocket wasn’t available to comment on the terms of the transaction

Elliott’s arrival had threatened to scupper the delisting, a move the Samwers favored because they wanted to take Rocket out of the glare of public markets and pursue “a long-term approach” to decision making. 

The terms now agreed between Rocket and Elliot allow shareholders to tender one Rocket Internet share for every four shares held. Global Founders, Rocket’s major investor with 62.32% of the share capital, will transfer most of its tender rights to Elliott, which has about 20.22% of the shares. 

Elliott has agreed to tender most of its rights and return its Rocket shares under the offer.

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