Neuberger Berman scores on Chattem deal

December 21, 2009

This morning, the big news in deal-land is that Sanofi-Aventis (SNY) is buying Chattem Inc. (CHTT) for around $1.9 billion or around $93.50 a share. Chattem, known for such brands as Icy-Hot and Gold Bond powder, saw its stock jump over 30% percent this morning since the stock closed at just under $70 on Friday. You can read the press release on the deal here and John Gapper of the FT has some interesting back-story about Chattem here.

Given this morning’s news, we decided to take a quick skim of Chattem’s recent filings to see whether anything jumped out at us. While we don’t normally pay close attention to 13Gs, it was hard to ignore this 13G/A filed by Neuberger Berman back in September. In the filing, Neuberger disclosed a big increase in the number of Chattem shares it held: 10.3% or 1.96 million up from an 8.5% stake or 1.65 million shares according to this 13G filed in June. There’s also Neuberger Berman’s most recent 13-F from mid-November.

According to my friends at Insider Score, Neuberger Berman paid an average price of $58.76 a share during the quarter, so being able to sell at $93.50 less than six months later ought to lead to some pre-holiday merry-making at Neuberger’s offices on Third Ave.

Digging in even deeper into the filings, it looks like Neuberger first took an interest in Chattem back in July 2007, when it disclosed a 10.3% stake in this 13G. But by April 2008, it had reduced its stake to just over 5% according to this filing. We’re guessing that was around the time Chattem was trading close to $80 a share in February 2008.

What’s the moral here? Sometimes a good idea remains a good idea.

Image source: Chattem Inc.

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