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OZ Management Raises Stake in Rockwood Holdings, Inc. (ROC) Amid Merger with Albemarle Corporation (ALB)

OZ Management, a hedge fund managed by Daniel S. Och, has reported increasing its stake in Rockwood Holdings, Inc. (NYSE:ROC) to 4.16 million from 2.49 million shares held earlier. Following the increase OZ Management owns 5.83% of Rockwood’s outstanding common stock, which is up from 3.50% held previously. Even though the stake is activist by nature, the fund stated in the filing that it has acquired shares of Rockwood Holdings for investment purposes and does not intend to change the control of the company.

Och-Ziff Capital Management

In fact, on July 15, Rockwood Holdings, Inc. (NYSE:ROC) entered into an agreement with Albemarle Corporation (NYSE:ALB), following which the latter intends to acquire the former in an cash-and-stock transaction. Under the terms of the deal, which values Rockwood at $85.53 per share, the shareholders of the acquired company will receive $50.65 in cash and around 0.48 of a share of Alebemarle  common stock. Following the closing of the deal, the former shareholders of Rockwood Holdings, Inc. (NYSE:ROC) will own around 30% of the merged company, while the rest will be held by the Albemarle shareholders. Albemarle Corporation (NYSE:ALB) will held a special shareholders meeting on November 14, where the shareholders will express their vote regarding the merger and issuance of common stock in connection with the deal.

OZ’s recent increase of its stake in Rockwood Holdings, Inc. (NYSE:ROC) is interesting especially taking into account that last month the fund reduced its stake in the company from 4.31 million shares to 2.49 million. In July, the fund surged its stake from only 100 shares it reported in its latest 13F to 4.31 million shares.

Despite the announcement of the merger, the stock of Rockwood Holdings, Inc. (NYSE:ROC) is still trading at around $81 per share, which is below the value of the company under the terms of the deal. The stock of Albemarle Corporation (NYSE:ALB) has dropped after the announcement of the merger, so far losing 5% since July 15.

Among other investors of Rockwood Holdings, Inc. (NYSE:ROC) is Jean-Marie Eveillard‘s First Eagle Investment Management, which reported ownership of 3.58 million shares in its latest 13F filing. It is followed by Jeffrey Gates‘ Gates Capital Management, which held over 3.06 million shares at the end of June, raising its stake by 22% on the quarter.

Disclosure: none

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