T. Rowe Price Gets Its Dander Up

The WSJ reports (subscription required) on a squabble among Baltimore firms to illustrate the increasingly aggressive tactics by some mutual fund managers to protect their shareholders.

"Early this year, mutual-fund manager Brian Berghuis learned that a company in his portfolio was targeted for takeover. Normally this would be good news. But when the T. Rowe Price manager examined the offer, he came to a different conclusion: The price for Laureate Education Inc. was so low it was "laughable," he says."

So he launched a public fight.

"In opposing the Laureate deal, Baltimore-based T. Rowe Price lobbied fellow shareholders to join the battle. It agreed to cover its legal costs out of its own pocket, rather than asking clients to foot the bill, should the battle go to court. The company also registered with the Securities and Exchange Commission as an activist investor, a step required for T. Rowe Price to oppose the takeover. It was only the second such filing in the company's 70-year history."

Laureate defended the deal, according to the Journal. "CEO Doug Becker, who led the buyout, says Laureate had 'only the interests of the company's stockholders at heart,' " the paper said.

By Dan Beyers  |  October 2, 2007; 7:06 AM ET
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