ValuePlays

Thank-you, MBIA v Ackman, iPhone, Happy Birthday

– Thank you for the mention.

– More thoughts on the subject

– Uh… not so great

– A Happy Birthday to George over at Fat Pitch

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Week one, disclose position in Longs Drug Stores (LDG). Next week, make 87% on investment when CVS (CVS) buys you out.

Reuters Reports:
“CVS Caremark will pay $71.50 per share for Longs to acquire some 521 Longs stores in California, Nevada, Arizona and Hawaii, as well as its Rx America subsidiary, a prescription benefits management services company.

The deal was expected to crimp earnings per share at CVS Caremark in its first year, but add to earnings beginning in 2010, the companies said.

CVS Caremark is expected to gain cost savings of approximately $100 million in 2009 and approximately $140 million to $150 million in 2010 from purchasing savings and lower selling, general and administrative costs.

“This transaction provides tremendous benefits to CVS Caremark by accelerating our expansion in very attractive drugstore markets and strengthening our geographic reach,” the company’s chairman and chief executive, Thomas Ryan, said in a statement.”

Ackman has an economic interest in 23% of the company. Quick math says he nets $667 million and a rough estimate profit of $580 million. Not a bad week at all…

Disclosure (“none” means no position):None

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Bill Ackman has filed an amended 13D this morning for Pershing’s investment in Longs Drug Stores (LDG)

Item 1. Security and Issuer
This Amendment No. 2 (this “Amendment No. 2”) amends and supplements the statement on Schedule 13D, as amended to date (the “Schedule 13D”), by (i) Pershing Square Capital Management, L.P., a Delaware limited partnership (“Pershing Square”), (ii) PS Management GP, LLC, a Delaware limited liability company (“PS Management”), (iii) Pershing Square GP, LLC, a Delaware limited liability company (“Pershing Square GP”), and (iv) William A. Ackman, a citizen of the United States of America (collectively, the “Reporting Persons”), relating to the common stock (the “Common Stock”), of Longs Drug Stores Corporation, a Maryland corporation (the “Issuer”). Unless otherwise defined herein, terms defined in the Schedule 13D shall have such defined meanings in this Amendment No. 2.

As of August 11, 2008, as reflected in this Amendment No. 2, the Reporting Persons are reporting beneficial ownership on an aggregate basis of 3,137,659 shares of Common Stock (approximately 8.8% of the outstanding shares of Common Stock). The Reporting Persons also have economic exposure to approximately 5,296,896 notional shares of Common Stock under certain cash-settled total return swaps (“Swaps”), bringing their total economic exposure to 8,434,555 shares of Common Stock (approximately 23.6% of the outstanding shares of Common Stock).

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Item 6 is hereby supplemented as follows:
In addition to (a) the Common Stock beneficially held by the Reporting Persons and (b) the Swaps previously reported by the Reporting Persons on the Schedule 13D, on August 8, 2008 and August 11, 2008, certain of the Reporting Persons entered into cash-settled total return swap agreements for Pershing Square L.P. (the “PSLP Swaps”) and Pershing Square International, Ltd. (the “PSIL Swaps,” and together with the PSLP Swaps, the “Amendment No. 2 Swaps”). The Amendment No. 2 Swaps constitute economic exposure to approximately 756,000 notional shares of Common Stock, have reference prices ranging from $53.55 to $54.69 and expire on dates ranging from November 30, 2009 through August 31, 2010. Under the terms of the Amendment No. 2 Swaps, (i) the applicable Pershing Square Fund will be obligated to pay to the counterparty any negative price performance of the notional number of shares of Common Stock subject to the applicable Amendment No. 2 Swap as of the expiration date of such Amendment No. 2 Swap, plus interest, and (ii) the counterparty will be obligated to pay to the applicable Pershing Square Fund any positive price performance of the notional number of shares of Common Stock subject to the applicable Amendment No. 2 Swap as of the expiration date of the Swap.

With regard to the PSIL Swaps, Pershing Square International, Ltd. will be entitled to cash payments during the term of the PSIL Swap in lieu of any dividends received by the counterparty on such notional shares of Common Stock. With regard to the PSLP Swaps, at maturity Pershing Square, L.P. will receive a cash payment from the counterparty equal to any dividends received by the counterparty on such notional shares of Common Stock during the term of the PSLP Swaps. All balances will be cash settled at the expiration date of the Amendment No. 2 Swaps. Including the Swaps disclosed on the Schedule 13D and the Amendment No. 2 Swaps, the Pershing Square Funds’ counterparties for their Swaps include entities related to BNP Paribas, Citibank, Credit Suisse and UBS.

The contracts relating to the Amendment No. 2 Swaps do not give the Reporting Persons direct or indirect voting, investment or dispositive control over any securities of the Issuer and do not require the counterparty thereto to acquire, hold, vote or dispose of any securities of the Issuer. Accordingly, the Reporting Persons disclaim any beneficial ownership in securities that may be referenced in such contracts relating to the Amendment No. 2 Swaps or that may be held from time to time by any counterparty to the contracts.

Full SEC Filing

Disclosure (“none” means no position):None

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