Celgene Corp. (CELG) and Bristol-Myers Squibb Co. (BMY)
Celgene comprises roughly 3.2% of Klarman's publicly-reported portfolio, while Bristol-Myers is around 1.6%.
Notably, the two companies are in the midst of a long-running merger attempt.
Bristol-Myers is working to acquire Celgene for one share of stock and $50 cash, plus a contingent value right worth up to $9 based on the outcome of future regulatory milestones.
When the deal was first announced in January, the buyout offer was valued at $74 billion (not including the contingent value right). Today, Celgene's market cap has fallen to $67 billion.
If the deal closes, Bristol-Myers shareholders will own roughly 70% of the combined entity, while Celgene shareholders own the remainder.
In January, some analysts estimated the deal had an 80% chance of closing. Those estimates appear a bit optimistic today.
Within weeks, Bristol-Myers voluntarily withdrew its pre-merger notification and report form after talking with the Federal Trade Commission. On Feb. 20, the company announced plans to refile the form, reiterating that the deal "remains on track" to close in the third quarter.
In April, the odds looked a little better after shareholders of both companies approved the deal. There had been earlier chatter that some shareholders would put up a fight.
Today, Bristol-Myer's stock is around $46. Adding in $50 of cash results in a takeover price of $96, plus a potential contingent value rights worth up to $9. Celgene trades at roughly $95 per share, meaning the contingent value right is currently receiving little to no value.
Klarman appears to be hedging his bets by investing in both sides of the equation.