The 13D filing must be submitted when a shareholder accumulates 5% or more of a company's shares.
For corporations, this filing is considered a declaration of war, as it grants the shareholder various rights to intervene in managent.
It was for this reason that Allergan convened an ergency eting less than an hour after Ha Si-heon made his 13D filing public.
Attendees included the CEO, CFO, IR representative, and key executives, along with the Chairman of the Board, the Lead Director, and legal advisors who were visiting the headquarters.
Allergan’s CEO, Beckett, stood up and announced the start of the eting.
“Thank you for attending this urgent eting despite your busy schedules. I never expected our opponent to act this swiftly.”
Allergan had been monitoring the market, so they were aware that an entity was acquiring shares in their company.
However, they had initially scheduled a strategy eting three days later to discuss counterasures.
Typically, after securing 5% of the shares, a shareholder would file within ten days.
Yet, Ha Si-heon filed his disclosure imdiately on the very day he secured his 5% stake.
The situation was more pressing than anticipated, forcing them to assemble the eting imdiately.
“So of you may have already seen the report, but the entity behind this is a newly established hedge fund called Pareto Innovation Capital. It’s been less than three months since its founding.”
Ordinarily, such a new fund would not be considered a major threat.
However, this case was different.
“The person leading this fund is rather unusual. So of you might have heard of the na Ha Si-heon…”
Several heads nodded around the table.
“Of course, I know him. He’s always been quite the troublemaker…”
“I never imagined Ha Si-heon would target us…”
“Are we the next prey of the Orca?”
Though the fund itself was new, Ha Si-heon’s reputation was already well-known on Wall Street.
Even as a rookie at Goldman, he had crushed a financial mogul during the Epicura case and exposed the fraud behind Theranos.
That infamous Orca—wasn't it him?
And now, that very Ha Si-heon had set his sights on Allergan.
“Is there any reason Allergan would be a target?”
The one who raised the question was Allergan’s external legal advisor, hired specifically to deal with Ha Si-heon.
“Ha Si-heon has already made a strong impression on the public and the market by revealing the truth about Theranos. If he claims fraud again, everyone will listen to him. So, let ask—is there any chance that we could be misunderstood in that way?”
In other words, was Allergan actually involved in any fraudulent activities?
CEO Beckett firmly shook his head.
“There is no such issue. And Ha Si-heon isn't claiming fraud either. For those who haven’t read it yet, we have prepared copies of the 13D filing he submitted.”
Activist funds that file 13D often attach letters explaining their intentions and plans.
Ha Si-heon had also expressed his stance in this way.
The docunts placed before the attendees had highlighted sections:
> Allergan is a solid company, but its current operations contain various risk factors that could threaten its long-term stability.
> To ensure continued growth, we propose expanding through strategic rgers and acquisitions (M&A).
> We would like to et with the managent to discuss this matter.
In short, Ha Si-heon was demanding an M&A strategy—and he wanted to negotiate about it.
“Today, we must decide whether to accept this eting or not.”
CEO Beckett straightened his posture.
Then, eting the eyes of everyone in the room, he firmly stated:
“But I am against it. The mont we agree to this eting, we signal to the market that Allergan is open to M&A discussions. Then, a flood of activist funds and corporations seeking M&A will rush in.”
In fact, several firms had previously approached Allergan with M&A proposals.
However, these discussions had never been publicly disclosed.
Since M&A processes involved significant costs, companies typically first consulted with the CEO in private before proceeding.
But CEO Beckett had always firmly rejected such approaches.
As a result, no discussions had ever progressed further.
If a CEO refuses M&A, the only remaining option is a hostile takeover, which requires trendous resources.
However, Ha Si-heon’s approach was unprecedented.
He skipped the informal inquiry process entirely and publicly demanded a eting about M&A.
“I believe we should reject this eting. It’s best to leave no room for M&A discussions.”
The CEO reiterated his stance.
However, the Chairman of the Board disagreed.
“Refusing to et with a 5% shareholder could create another risk.”
A 13D shareholder has the right to call a special shareholders' eting and initiate a vote.
“If so shareholders support M&A, they might accuse us of rejecting discussions without even listening. And if the situation escalates…”
If Ha Si-heon rallied those shareholders, there could be a proxy battle at the shareholders' eting, leading to a managent and board shake-up.
If that happened, the newly appointed managent could forcibly push M&A forward.
Of course, this was a worst-case scenario.
“I don’t believe Ha Si-heon holds that much influence. This is his fund’s first official campaign—shareholders won’t trust him that easily.”
The CEO spoke with confidence, but the Chairman of the Board thought differently.
“Under normal circumstances, that would be true. But with Ha Si-heon, it’s different.”
At those words, the room fell silent.
That was the power of reputation.
Ha Si-heon’s abnormally high credibility made him soone they couldn’t afford to underestimate.
“We need to gauge the shareholders' opinions first.”
Thus, the CEO, executives, and the Chairman began contacting major shareholders to assess their stance on Ha Si-heon’s declaration of war.
However—
> [Why not at least hear what he has to say?]
To their surprise, most shareholders supported eting with him.
> [There are rumors that Ha Si-heon has his own unique algorithm. So far, it has shown an exceptionally high accuracy.]
At this, the CEO furrowed his brows, his expression turning unpleasant.
He had heard those rumors before.
However—
“That’s absurd. An 80% accuracy rate in the pharmaceutical industry is impossible. Do you really believe that?”
> Dismissing it just because it seems unlikely isn’t wise either. So say he even predicted the recent Ebola outbreak.
“That must have been a coincidence.”
> [If an algorithm has accurately predicted two major events, isn't it worth at least listening to?]
Even if they didn’t fully trust Ha Si-heon, many shareholders recomnded eting with him.
“……… It seems we should et him after all.”
Just as the Board and the CEO were discussing their stance—
A voice echoed from the speakerphone.
> We have reached your financial advisor. Would you like to connect you now?
To deal with the situation, Allergan had hired an external financial advisor.
However, since he was based in New York, he could not attend the ergency eting in California in person, so he had to join remotely.
Then, from the speakerphone, a deep voice ca through.
> Dave Pierce, Head of Investnt Banking at Goldman.
The advisor they had hired was none other than Pierce—a renowned M&A expert who had worked directly with Ha Si-heon.
“You know Ha Si-heon’s thods well. What do you think?”
Key Point: The Structure of Pareto’s Accumulated Shares
> The type of shares that Pareto has accumulated is worth noting. The shares Ha Si-heon used were rather unusual. He only utilized thods that did not require a 5% disclosure obligation, using cash settlent options.
A series of detailed explanations followed, but the conclusion was clear.
> He skillfully navigated the gray area, ensuring that no one could detect his actions. Had he continued to keep things hidden, Allergan would have been caught off guard by a surprise attack. But in the end, Ha Si-heon chose to reveal himself.
Indeed, Ha Si-heon’s behavior was rather peculiar.
He moved in the shadows when the situation was dangerous but then beat the war drums when it was ti to strike.
> It lacks consistency.
At first glance, it was difficult to understand.
Typically, one either carries out a complete surprise attack or asserts their presence from the start.
“Why did he act this way?”
> I don’t know.
It was an overly candid response.
> But one thing is certain—he has a hidden agenda.
Pierce’s voice carried unwavering conviction.
> It would be wise to comply while Ha Si-heon is still speaking politely. Otherwise, he will inevitably set a fire, using the part of his plan that he has yet to reveal.
“But we can’t just agree to his demands out of fear that he might set a fire.”
The CEO remained firm, but Pierce did not back down.
> The last two fires he set were Epicura and Theranos.
Silence fell over the room.
Each of those cases had been massive—events that had shaken entire nations.
> If he doesn’t get the attention he wants, he will ignite a fire to force it. Even if there’s only a 1% chance that such a fire could spread, are you really going to refuse a eting with him?
The conclusion ca swiftly.
“Let’s et him—at least for now.”
***
Allergan Headquarters, California
This ant I had to board a plane again.
But this ti, I made a bold decision.
“Book a private jet.”
For once, I decided not to fly first class.
There was no need for to own a jet outright. Plenty of companies specialized in private jet rentals.
However, when I requested a dium-sized jet for up to ten passengers, my assistant returned with an awkward expression.
“The compliance departnt says approval is difficult. There’s been increased scrutiny on executives using company funds for private jets. They insist on exercising caution…”
They weren’t wrong.
When a CEO was ousted, the most frequently used pretext was often "misusing company funds for private jet travel."
But no matter what, this ti, I had to take a private jet.
“The cost shouldn’t be much different from three people flying first class, right?”
“It’s three tis the cost. They’re asking for a justifiable reason…”
What a nuisance.
The compliance departnt was essentially the corporate ethics division, and it was their job to nitpick like this.
"This is exactly why I should own one myself…"
If I had my own private jet, I wouldn’t have to request permission every ti.
But I wasn’t at that level yet.
For now, I had no choice but to call the compliance officer directly and convince them.
> Sotis, there’s sothing more important than money—ti.
> [The flight ti difference is minimal.]
> I’m not talking about flight duration. In first class, I can’t hold a proper strategy eting with my team. In a private jet, we can conduct a six-hour eting.
> This trip was arranged on short notice, so I need to maximize efficiency during travel.
> That’s why a private space is essential.
> [……Understood.]
And so, for the first ti in my life, I boarded a private jet.
Of course, it wasn’t mine—it was a rental.
And it wasn’t even a Gulfstream—just a modest 10-seater dium-sized jet.
But still—
"This is on a whole different level from first class."
The journey was exceptionally smooth.
Instead of the crowded Newark Airport, I could use the quiet Teterboro Airport.
"So peaceful."
There were no long lines, no tedious security checks, no endless noise, and no waiting tis.
Skipping all of that and boarding in just 15 minutes made first class feel obsolete.
“Not bad at all.”
The plane was small, but satisfying.
Most importantly, there were no rows of seats lined up like prisoners.
There was a conference table for discussions on one side and luxurious leather sofas for relaxation on the other.
“When would you like your al, sir?”
“Please serve it in an hour.”
Unlike on comrcial flights, I could pre-order exactly what I wanted—no generic airline food.
Both the nu and al timing were entirely under my control.
"Perfect."
I even found myself humming in satisfaction.
Once we took off, I imdiately began the strategy eting.
Joining on this trip were Dobby and Laurent.
“So… shall we discuss what you’ve found?”
I had instructed them to use their Wall Street connections to investigate everything about Allergan’s CEO, Beckett.
Even seemingly trivial details could be valuable.
“He is undeniably capable,” Laurent began.
“Under his leadership, Allergan’s revenue grew from $10 billion to $70 billion. He was also instruntal in making Botox a global success. Because of that, he has an exceptionally high level of trust from employees, executives, and the board."
He was practically the embodint of the company itself.
“He’s British and has a resolute personality. He doesn’t get easily swayed and is extrely stubborn.”
Even these personality traits were valuable intel.
“He has received countless M&A proposals behind the scenes but has rejected all of them outright.”
Now that was an interesting piece of information.
“So of those proposals were reportedly incredibly lucrative, yet he didn’t even entertain them. He’s known as a hardcore anti-M&A advocate.”
And yet, I sent him a letter demanding an M&A.
That was my core strategy.
Thus, the goal of this trip was simple— Convince Beckett.
“…Do you really think that’s possible?”
Laurent hesitated.
"From everything we've heard, he seems like soone who completely rejects the idea of M&A…"
But I simply smiled confidently.
“In Korea, we have a saying—‘the fire has reached your feet.’”
“…Excuse ?”
I smirked like a wise sage and continued.
“It ans that even things you wouldn’t normally do, or have been postponing, beco unavoidable once the fire reaches you.”
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