ValueAct To Pay $11 Mln To Settle DoJ Suit

(RTTNews) - The U.S. Department of Justice announced that ValueAct has agreed to pay $11 million to settle allegations that certain ValueAct entities violated the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. As part of the settlement, ValueAct has also agreed to injunctive relief designed to prevent future violations.

On November 17, 2014, Baker Hughes and Halliburton announced their plan to merge in a deal valued at $35 billion. Thereafter, ValueAct, an activist investment firm, purchased over $2.5 billion of Halliburton and Baker Hughes voting shares without complying with the HSR Act's notification requirements.

According to a complaint filed on April 4, 2016 in the U.S. District Court for the Northern District of California, ValueAct purchased these shares with the intent to influence the companies' business decisions - including decisions related to the merger - and therefore could not rely on the limited "investment-only" exemption to the HSR Act's notification requirements.

The complaint detailed how ValueAct used its access to senior executives of both Halliburton and Baker Hughes to attempt to influence the companies' proposed merger and other aspects of their businesses.

Halliburton and Baker Hughes abandoned their proposed merger on May 2, 2016 after the Antitrust Division sued to block it in U.S. District Court for the District of Delaware.

Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the department. The current maximum civil penalty for an HSR violation is $16,000 per day; however, the maximum penalty will increase to $40,000 per day effective August 1, 2016.

As part of the settlement, ValueAct agreed to pay a record $11 million. The highest fine previously paid for an HSR violation was $5.67 million. ValueAct is also enjoined from relying on the "investment-only" exemption when it intends to influence, or is considering influencing, certain basic business decisions, including those relating to merger and acquisition strategy, corporate restructuring, and the company's pricing, production capacity, or production output.