Loeb asks for board seats at Baxter, discloses new stake

By Svea Herbst-Bayliss

BOSTON (Reuters) - Billionaire investor Daniel Loeb on Wednesday asked for two board seats at Baxter International (BAX.N) after publicly unveiling the roughly $2 billion stake his hedge fund, Third Point, recently took in the healthcare company.

Loeb wrote a letter to Baxter Chief Executive Robert Parkinson, telling him that Third Point is now the company's biggest investor and that he could help find a new leader for the company. "We have an excellent track record of participating on corporate boards and on CEO search committees in particular," Loeb wrote in the letter.

Parkinson, who has been CEO since 2004, said last week that he plans to step down. As a board member, Loeb helped pick Marissa Mayer as Yahoo! Inc (YHOO.O) CEO three years ago.

In a regulatory filing also made on Wednesday, Third Point said it owns 7 percent, or 37.9 million shares, in Baxter.

Third Point oversees $17.5 billion in assets and has gained attention with battles for board seats at Sotheby's (BID.N)and Dow Chemicals (DOW.N).

Loeb's Third Point is one of the most closely watched hedge funds in the $3 trillion industry, boasting an average annual return of 20.5 percent in its two decades in business.

Baxter's share price jumped nearly 5 percent to $42.24 on news that Loeb was eager to become involved on the board.

In a separate letter sent to investors last week and seen by Reuters, Loeb defended activist investing at a time politicians, union leaders and some academics have accused these types of investors of merely wanting to make quick returns.

He said that Third Point's activist bets are complex and that the fund holds onto its investment for a longer period, helping guide the company to fresh growth. "Our investors have benefited from our ability to install visionary leaders," Loeb wrote.

In that letter, Loeb also said that the firm has taken a new position in Suzuki Motor Company , making another bet on a Japanese company at a time of improved conditions for shareholders.

(Reporting by Svea Herbst-Bayliss; Editing by Jonathan Oatis)