A Wall Street Genius's Final Investment Playbook-Chapter 171

After that day's meeting.

The legal teams of Ha Si-heon and Icahn swiftly entered into intensive negotiations to establish an SPV (Special Purpose Vehicle).

And two weeks later, their joint fund, the ‘IH Fund,' was officially launched.

IH Fund.

Named after their initials, this fund was established with the specific purpose of investing in the pharmaceutical company Allergan.

Icahn and Ha Si-heon each contributed 5% of Allergan’s shares, totaling 10%, and decision-making power was evenly split at 50:50.

From then on, the process flowed naturally.

<Icahn-Ha Si-heon's Unprecedented Alliance… 13D Shock>

The IH Fund proceeded with a 13D filing, a mandatory disclosure after acquiring more than 5% of shares.

This news sent shockwaves through Wall Street.

<A Collaboration Between Wall Street’s Legend and a Rising Star?>

<Icahn Establishes His First SPV>

Of course, setting up an SPV was a common practice in the financial industry.

Young fund managers like Ackman often used SPVs to create separate entities for managing the risks of specific stocks.

But Icahn was different.

He had always insisted on acting alone, earning the nickname ‘Wall Street’s Lone Wolf.’

And yet—

"Icahn formed a joint fund? Not just a simple agreement but an actual SPV where they share everything?"

"And with Ha Si-heon, of all people…? That guy’s just a rookie—his fund hasn’t even been around for six months!"

The fact that Icahn had formed an alliance with someone was shocking enough, but his choice of partner was even more astonishing.

Ha Si-heon was far too inexperienced to stand alongside him.

Of course, Ha Si-heon was not just any rookie.

Before founding his fund, he had already achieved remarkable success with Epicura and Theranos.

In just the early stages of his fund, he had attracted $12 billion in AUM (Assets Under Management).

However.

Even considering that, the prevailing opinion was that Icahn had no reason to partner with someone of Ha Si-heon's level.

"Did he get blackmailed or something? Or maybe Kissinger personally asked him…?"

"Since when does Icahn move at someone else’s request? That stubborn, eccentric old man?"

The fact that a legendary veteran of Wall Street had joined hands with a rising star like Ha Si-heon was already a sensational topic.

But there was something else adding fuel to the fire…

<Icahn and Ha Si-heon vs. Ackman and Valeant… The Battle Over Allergan>

This unusual duo was proving to be anything but ordinary.

In the IH Fund’s 13D filing, Icahn and Ha Si-heon publicly revealed their strategy.

<The fund intends to pursue M&A for the expansion of Allergan but stands in opposition to the recent acquisition proposal by Valeant…>

In other words, they had just declared war against Ackman, who was leading Valeant’s bid to acquire Allergan.

"Icahn is really going after Ackman this time. First Herbalife, and now Allergan—he's basically following him around, hunting him down."

"And with Ha Si-heon joining him? If we’re talking about hunting, even Orca wouldn't lose in a fight. This is going to be huge."

Valeant and Ackman.

Allergan and Icahn-Ha Si-heon.

This showdown was about to send new shockwaves through Wall Street.

The spectators of Wall Street, already breathless with anticipation, were now fully alert, unwilling to miss a single moment of the impending battle.

***

At that time.

The other key figure in this saga—the ‘villain’ of the story—Ackman, also caught wind of the alliance.

"Icahn and Ha Si-heon joined forces?"

Deep wrinkles formed on Ackman’s forehead.

Individually, neither of them posed much of a problem.

Icahn was an aging veteran past his prime, while Ha Si-heon was still just a greenhorn in the industry.

But if the two of them combined their forces…?

That was a variable he could not afford to ignore.

"Set up meetings with the major shareholders immediately. As soon as possible."

He had to meet Allergan’s major shareholders directly and convince them that Valeant’s offer was more beneficial.

However, his PM (Portfolio Manager) looked troubled.

"That’s… The earliest they’re available is next week."

Normally, when people heard Ackman’s name, they would make time for him no matter how busy they were.

But now, they were politely refusing him.

Clearly, Icahn’s involvement had changed the game.

Ackman swallowed his frustration.

‘If only the ambush had worked, none of this would be happening…'

If his Trojan Horse operation had succeeded—

If the poison pill had been triggered—

The major shareholders might have become disillusioned with Allergan’s management and been more open to Ackman’s proposal.

But the plan had failed, and the shareholders’ trust in Allergan’s board remained solid.

‘What a shame.’

However, Ackman quickly brushed off his disappointment.

That was the past.

Now, he had to focus on realistic strategies.

He had to meet with the shareholders as soon as possible and persuade them with logical arguments and clear financial benefits.

As Ackman pondered this, his PM cautiously asked,

"What do you think Icahn and Ha Si-heon will do next? There are rumors that they have equal decision-making power…"

To Ackman, this was quite surprising as well.

Icahn, the stubborn lone wolf, had supposedly given Ha Si-heon half the authority?

But he dismissed it as mere optics.

"Icahn will take the lead in the end. Considering their levels, that’s only natural. He’ll do what he always does—he’ll push his way into the boardroom and pressure the directors."

Icahn was an old-school investor who preferred closed-door deals.

He liked to negotiate directly with CEOs, making all the decisions behind the scenes, while keeping shareholders in the dark.

But that approach no longer worked.

Besides.

"If Icahn takes center stage, that actually works in our favor. His reputation as a corporate raider still precedes him."

On Wall Street, Icahn was still seen as a ruthless corporate predator.

A man who stripped companies for their assets and left nothing but bones.

Standing against him might actually push the major shareholders toward Ackman’s side.

"But… what if, by any chance, Ha Si-heon takes the lead?"

The PM asked again, more cautiously this time.

Ackman hesitated.

"The chances are slim, but…"

Ha Si-heon taking control of their alliance?

That was an unthinkable scenario.

There was no way that stubborn old man would hand over such power to a younger investor.

‘But…’

Ackman rested his chin on his hand, recalling his past encounter with Ha Si-heon.

He was not someone to be underestimated.

No matter how unlikely, Ackman had to prepare for the possibility.

"It’s hard to predict."

Ha Si-heon was still a newcomer in activist investing.

There wasn’t enough data to anticipate his moves.

If he unexpectedly seized control in this deal, things could spiral into uncharted territory.

But Ackman soon shook his head.

"No matter how competent Ha Si-heon is, he’s still an outsider. The key is the board. And there’s no way the directors will give him a seat."

Considering the conservative nature of the board, there was no way they would hand over a seat to an inexperienced young investor.

However.

Ackman’s prediction was off the mark.

At that very moment, Allergan’s CEO and board were facing a crucial decision.

"I just received a call from Icahn. He’s requesting a board seat. But, he wants to give it up in favor of Ha Si-heon."

Icahn decided to hand over the board seat without hesitation.

For Icahn, there was a clear reason for this.

While he wanted to directly bet on the core issue of this situation—‘fraud’—he believed it was better to shift the associated risks onto Ha Si-heon.

But to the Allergan board members, who were unaware of Icahn’s intentions, his move held an entirely different meaning.

"Icahn is giving up his board seat… He must have a great deal of trust and admiration for Ha Si-heon."

A seat on the board was at the heart of the matter.

It granted access to sensitive corporate information and direct involvement in key decision-making.

If Icahn was willing to give it up so freely, it meant that he saw Ha Si-heon as more than just a simple partner.

"But why would Icahn choose to push Ha Si-heon forward instead of taking the seat himself?"

There was only one convincing reason.

When a veteran who had dominated an era passed on leadership to a promising newcomer…

"Could it be that he’s grooming him as his successor?"

That was the most plausible speculation.

"But Icahn already has mentees he personally trained, not to mention his own son… So why Ha Si-heon?"

Many questions remained, but there was no time to dwell on them now.

The immediate crisis had to be dealt with first.

"Regardless, since they already hold a 10% stake, it will be difficult to reject their board seat request."

A shareholder with more than 10% ownership wielded immense power.

They had veto rights over major company decisions, could call for a special shareholders’ meeting, and could even force an external audit.

For Allergan, the smart choice was to comply with Icahn’s demand as much as possible.

"But Ha Si-heon still lacks experience…"

"If he is co-managing the fund with Icahn, he won’t be making decisions alone. He’ll consult with Icahn on important matters."

With Icahn providing guidance, there would be no major mistakes due to inexperience.

More importantly, the board had to consider a greater risk.

"If we reject this proposal… Icahn himself might demand the board seat."

"…"

The moment those words were spoken, silence fell over the meeting room.

Icahn joining the board?

That was a nightmare scenario for countless corporate executives.

Icahn was known for exerting invisible pressure on CEOs.

No one knew exactly how he manipulated them, but the fact remained—he always got what he wanted.

Most recently, even the world’s leading company, Enple, had failed to withstand his pressure.

When Icahn demanded a share buyback, Enple ultimately surrendered.

If even Enple couldn't refuse his demands, could Allergan possibly stand against him?

‘Then our only viable choice is…'

Rather than confronting the ruthless old wolf, it seemed wiser to collaborate with the rising star, Ha Si-heon.

The same thoughts stirred in the minds of the board members.

"Alright, let’s proceed with the vote. Those in favor of appointing Ha Si-heon as a new board member, please raise your hand."

All nine board members raised their hands without hesitation.

Ha Si-heon’s appointment as a director was approved unanimously.

***

The following Tuesday, I boarded a plane to California once again to attend my first board meeting as an official director.

The moment I stepped into the meeting room, the older board members turned their heads toward me.

"So you’re Ha Si-heon. You’re much taller than you looked in the video calls."

"You seem quite young."

"Welcome."

Although their words were welcoming, their expressions were anything but.

The fact that I was both Asian and young created a subtle sense of distance between me and the other directors.

As I was about to take a seat, a director beside me stopped me and pointed to the corner of the room.

"Your seat is over there. That’s where Dr. Fazli used to sit."

Dr. Fazli had been a member of the board before I took over.

He had stepped down temporarily to make way for me…

In other words, I had essentially pushed him out and taken his place.

That was probably why the other directors weren’t looking at me favorably.

I didn’t care.

I simply took my designated seat.

Soon, the lead director spoke up to start the meeting.

"Today’s agenda is to make a final decision regarding Valeant’s acquisition proposal. Sean, since you might not be familiar with all the details yet, let me give you a brief overview."

I had heard about Ackman and Valeant’s attempt to acquire Allergan, but the exact offer details had never been publicly disclosed.

Only the board members here knew the specifics, and now they were sharing that information with me.

"They have proposed a total offer of $47 billion—$15 billion in cash, with the remaining amount paid in Valeant stock. The stock exchange ratio is 0.83 Valeant shares for every 1 Allergan share. At current market prices, this portion is valued at approximately $31.1 billion."

Currently, Allergan’s market capitalization stood at $39 billion.

Valeant’s offer included a 15% premium on Allergan’s stock price.

"We rejected that offer. In response, they immediately revised their proposal. They increased their bid to $58.3 per share, raising the total by $6.3 billion from the initial offer. Since this revised offer came right after our rejection, we believe it warrants a more careful review."

After finishing the explanation, the director turned to look at me in silence.

A moment later, he asked in a calm but weighty tone.

"Sean, what do you think we should do?"

All eyes in the meeting room turned to me at once.

The directors were clearly curious about the perspective of the newest member.

‘They’re probably trying to gauge how much my views align with their own.’

I took a deep breath and voiced my opinion without hesitation.

"To be honest, I don’t believe Valeant’s offer properly reflects the true value of our company. Especially since a significant portion of the acquisition price is in Valeant stock, which presents a considerable risk. This means the deal’s value is entirely dependent on Valeant’s stock price remaining stable."

The directors exchanged meaningful glances after hearing my response.

The lead director soon nodded, showing his agreement.

"I concur. We also believe their business model is not sustainable in the long run. At this point, most of us are inclined to reject their offer."

The board immediately resumed processing the agenda.

"Those in favor of rejecting Valeant’s proposal, please raise your hand."

Every director in the room, myself included, raised their hand.

Unanimous decision.

With that, the second revised offer from Valeant was officially rejected.

Now, the next step…

"The motion has been passed. Now, we must move on to our next issue. We need to appoint a board representative to lead future negotiations with Ackman’s team."

Someone had to take the lead in the negotiations with Ackman.

But who would that be?

I unconsciously adjusted my posture.

This was the role I was aiming for—the lead role in this battle.

The one to go head-to-head with the ‘villain’ Ackman and negotiate directly.

This was the role of the protagonist.

I calmly raised my hand and said,

"I would like to nominate myself as the point man."