SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

 

Under the Securities Exchange Act of 1934

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE

13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)*

 

MAGELLAN HEALTH SERVICES, INC.

(Name of Issuer)

 

 

Ordinary Common Stock, $0.01 Par Value

(Title of Class of Securities)

 

 

559079207

(CUSIP Number)

 

 

David K. Robbins, Esq.

Bingham McCutchen LLP

355 South Grand Avenue, 44^th Floor

Los Angeles, CA 90071

(213) 680-6400

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

 

 

March 5, 2008

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box  ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

 

*

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

---

SCHEDULE 13D

CUSIP No. 559079207

 

1		NAME OF REPORTING PERSONS   Shamrock Activist Value Fund, L.P. – 35-2239069
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  x (b)  ¨
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   WC
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   Not Applicable		¨
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware

NUMBER OF   SHARES   BENEFICIALLY   OWNED BY   EACH   REPORTING   PERSON   WITH		7    SOLE VOTING POWER          0
		8    SHARED VOTING POWER          1,786,743 Ordinary Common Shares*
		9    SOLE DISPOSITIVE POWER          0
		10    SHARED DISPOSITIVE POWER          1,786,743 Ordinary Common Shares*

11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   1,786,743 Ordinary Common Shares*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)		¨
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   4.44%*
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   PN

 

*	See Item 5 hereof

---

SCHEDULE 13D

CUSIP No. 559079207

 

1		NAME OF REPORTING PERSONS   Shamrock Activist Value Fund II, L.P. – 55-0908199
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  x (b)  ¨
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   WC
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   Not Applicable		¨
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Virginia

NUMBER OF   SHARES   BENEFICIALLY   OWNED BY   EACH   REPORTING   PERSON   WITH		7    SOLE VOTING POWER          0
		8    SHARED VOTING POWER          344,614 Ordinary Common Shares*
		9    SOLE DISPOSITIVE POWER          0
		10    SHARED DISPOSITIVE POWER          344,614 Ordinary Common Shares*

11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   344,614 Ordinary Common Shares*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)		¨
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   0.85%*
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   PN

 

*	See Item 5 hereof

---

SCHEDULE 13D

CUSIP No. 559079207

 

1		NAME OF REPORTING PERSONS   Shamrock Activist Value Fund III, L.P. – 11-3768779
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  x (b)  ¨
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   WC
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   Not Applicable		¨
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware

NUMBER OF   SHARES   BENEFICIALLY   OWNED BY   EACH   REPORTING   PERSON   WITH		7    SOLE VOTING POWER          0
		8    SHARED VOTING POWER          1,069 Ordinary Common Shares*
		9    SOLE DISPOSITIVE POWER          0
		10    SHARED DISPOSITIVE POWER          1,069 Ordinary Common Shares*

11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   1,069 Ordinary Common Shares*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)		¨
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   0.003%*
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   PN

 

*	See Item 5 hereof

---

SCHEDULE 13D

CUSIP No. 559079207

 

1		NAME OF REPORTING PERSONS   Shamrock Activist Value Fund GP, L.L.C. –37-1497874
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  x (b)  ¨
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   Not Applicable
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   Not Applicable		¨
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware

NUMBER OF   SHARES   BENEFICIALLY   OWNED BY   EACH   REPORTING   PERSON   WITH		7    SOLE VOTING POWER          0
		8    SHARED VOTING POWER          2,132,426 Ordinary Common Shares*
		9    SOLE DISPOSITIVE POWER          0
		10    SHARED DISPOSITIVE POWER          2,132,426 Ordinary Common Shares*

11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   2,132,426 Ordinary Common Shares*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)		¨
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   5.29%*
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   OO

 

*	See Item 5 hereof

---

SCHEDULE 13D

CUSIP No. 559079207

 

1		NAME OF REPORTING PERSONS   Shamrock Partners Activist Value Fund, L.L.C. – 87-0733755
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)  x (b)  ¨
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   Not Applicable
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)   Not Applicable		¨
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware

NUMBER OF   SHARES   BENEFICIALLY   OWNED BY   EACH   REPORTING   PERSON   WITH		7    SOLE VOTING POWER          2,132,426 Ordinary Common Shares*
		8    SHARED VOTING POWER          0
		9    SOLE DISPOSITIVE POWER          2,132,426 Ordinary Common Shares*
		10    SHARED DISPOSITIVE POWER          0

11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   2,132,426 Ordinary Common Shares*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)		¨
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   5.29%*
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   OO

 

*	See Item 5 hereof

---

INTRODUCTION

The securities to which this statement relates are shares of Ordinary Common Stock, $0.01 par value per share (“Ordinary Common Shares”), of Magellan Health Services, Inc., a Delaware corporation (the “Company”). The principal executive offices of the Company are located at 55 Nod Road, Avon, Connecticut 06001.

 

ITEM 2.

Identity and Background.

(a)-(c), (f). The Reporting Persons are: (i) Shamrock Activist Value Fund, L.P., a Delaware limited partnership (“SAVF”), (ii) Shamrock Activist Value Fund II, L.P., a Virginia limited partnership (“SAVF II”), (iii) Shamrock Activist Value Fund III, L.P., a Delaware limited partnership (“SAVF III”), (iv) Shamrock Activist Value Fund GP, L.L.C., a Delaware limited liability company and the general partner of SAVF, SAVF II and SAVF III (the “General Partner”) and (v) Shamrock Partners Activist Value Fund, L.L.C., a Delaware limited liability company and the managing member of the General Partner (“Shamrock Partners”). The principal business of SAVF, SAVF II and SAVF III (SAVF, SAVF II and SAVF III collectively, are referred to herein as “Shamrock Activist Value Fund”) is investing in the securities of publicly traded small and micro-cap companies in the United States. The principal business of the General Partner is acting as general partner of Shamrock Activist Value Fund, and the principal business of Shamrock Partners is acting as the managing member of the General Partner.

The managing members of Shamrock Partners are Shamrock Holdings of California, Inc., a California corporation (“SHOC”), and Stanley P. Gold, an individual who is President of SHOC. All of the capital stock of SHOC is owned by Shamrock Holdings, Inc., a Delaware corporation (“SHI”). SHOC and SHI, together with their subsidiary entities, are holding companies engaged in the making, holding and disposing of investments in various industries, principally in the United States and Israel.

The Roy E. Disney Trust and the Patricia A. Disney Trust each own approximately 2.26% of the common stock of SHI. Roy Patrick Disney, Susan Disney Lord, Abigail Edna Disney and Timothy J. Disney own an aggregate of approximately 45.4% of the common stock of SHI. In addition, Stanley P. Gold is the sole trustee of four trusts established for the benefit of Roy Patrick Disney, Susan Disney Lord, Abigail Edna Disney and Timothy J. Disney, which hold an aggregate of approximately 50% of SHI common stock. Mr. Gold is also the trustee of the Patricia Disney Trust.

The principal executive offices of Shamrock Activist Value Fund, the General Partner, Shamrock Partners, SHOC and SHI are located at 4444 W. Lakeside Drive, Burbank, California 91505.

---

The business address of each of the persons listed below is 4444 W. Lakeside Drive, Burbank, California 91505. The names and principal occupations or employments of the directors, executive officers and controlling persons of Shamrock Activist Value Fund, the General Partner, Shamrock Partners, SHOC and SHI are as follows:

 

Name		Principal Occupation Or Employment
Roy E. Disney		Chairman of the Board of Directors of SHI and SHOC. Chairman of the Board of Directors of Shamrock Capital Advisors, Inc., a Delaware corporation (“SCA”) (a subsidiary of SHOC that provides management and consulting services, principally to SHOC and investment partnerships organized by SHOC, including businesses in which such partnerships invest). The principal executive office of SCA is 4444 W. Lakeside Drive, Burbank, CA 91505.
Abigail E. Disney		Vice Chairman of the Board of Directors of SHI and Executive Vice President of SHOC; investor.
Roy Patrick Disney		Director of SHI; investor.
Susan Disney Lord		Director of SHI; investor.
Abigail E. Disney		Vice Chairman of the Board of Directors of SHI; investor.
Timothy J. Disney		Director of SHI; investor.
Stanley P. Gold		Director and President of SHI and SHOC. Director, President and Managing Director of SCA. Managing Member and President of Shamrock Partners.
Michael J. McConnell		Managing Director of SCA; Vice President of SHOC and Shamrock Partners.
Eugene I. Krieger		Vice Chairman of the Board of Directors and Chief Operating Officer of SHI. Vice Chairman of the Board of Directors of SCA. Vice President of SHOC and Shamrock Partners.
Robert G. Moskowitz		Executive Vice President of SHI and SHOC; Managing Director of SCA.
Gregory S. Martin		Chief Financial Officer and Treasurer of SHOC, SHI, SCA and Shamrock Partners.

All of the persons listed above are citizens and residents of the United States.

(d)-(e) During the last five years, none of the Reporting Persons or, to the Reporting Persons’ best knowledge, any of their directors, executive officers or controlling persons, as the case may be, has been convicted in a criminal proceeding (excluding traffic violations or similar

---

misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

ITEM 3.

Source and Amount of Funds or Other Consideration.

The total amount of funds used by SAVF to purchase the 1,786,743 Ordinary Common Shares reported herein was $64,620,458 (excluding brokerage commissions). All of such funds were derived from capital contributions to SAVF.

The total amount of funds used by SAVF II to purchase the 344,614 Ordinary Common Shares reported herein was $19,729,774 (excluding brokerage commissions). All of such funds were derived from capital contributions to SAVF II.

The total amount of funds used by SAVF III to purchase the 1,069 Ordinary Common Shares reported herein was $3,515,953 (excluding brokerage commissions). All of such funds were derived from capital contributions to SAVF III.

 

ITEM 4.

Purpose of Transaction.

Shamrock Activist Value Fund acquired the 2,132,426 shares owned by it based on the Reporting Persons’ belief that the Ordinary Common Shares represent an attractive investment opportunity.

On December 3, 2007, the Reporting Persons submitted a shareholder proposal for inclusion in the Company’s Proxy Statement for its 2008 Annual Meeting of Stockholders, pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, to declassify the Board of Directors of the Company so that all directors of the Company would be required to stand for election annually. The Reporting Persons believe that board declassification is an important corporate governance practice which promotes director and officer accountability and in turn strengthens financial performance and improves shareholder value. A copy of the Reporting Persons’ proposal to declassify the Company’s Board of Directors, with supporting statement, is attached hereto as Exhibit 1 and incorporated herein by reference.

The Reporting Persons believe that shareholder value could be enhanced if the Company were to return excess capital to its shareholders. The Reporting Persons believe that the Company has sufficient available unrestricted cash and debt capacity to return a substantial amount of cash to the Company’s shareholders, whether as a one-time special dividend or through a stock repurchase program. On October 22, 2007, SCA, on behalf of the Reporting Persons, sent a letter to the Board of Directors of the Company recommending that the Company authorize a one-time special dividend of $12.00 per share. A copy of SCA’s letter to the Board of Directors of the Company is attached hereto as Exhibit 2 and incorporated herein by reference.

---

The Reporting Persons may determine from time to time in the future, based on market and general economic conditions, the business affairs and financial conditions of the Company, the availability of securities at favorable prices and alternative investment opportunities available to the Reporting Persons, and other factors that the Reporting Persons may deem relevant, to acquire additional securities of the Company in the open market, in privately negotiated transactions or otherwise, or to sell some or all of the securities it now holds or hereafter acquires as set forth above or otherwise.

Except as stated in response to this Item 4, the Reporting Persons shall have no current plans or proposals with respect to the Company or its securities of the types enumerated in paragraphs (a) through (j) of this Item 4 to the form Schedule 13D promulgated under the Act.

 

ITEM 5.

Interests in Securities of the Issuer.

(a), (b) SAVF, SAVF II and SAVF III are controlled by the General Partner. As a result, each of SAVF, SAVF II and SAVF III may be deemed members of a group and may be deemed to beneficially own for purposes of Section 13(d) the shares beneficially owned for such purposes by the others.

SAVF is the owner of 1,786,743 Ordinary Common Shares, which represents approximately 4.44% of the issued and outstanding Ordinary Common Shares. SAVF II is the owner of 344,614 Ordinary Common Shares, which represents approximately 0.85% of the issued and outstanding Ordinary Common Shares. SAVF III is the owner of 1,069 Ordinary Common Shares, which represents approximately .003% of the issued and outstanding Ordinary Common Shares.

As the general partner of Shamrock Activist Value Fund, the General Partner may be deemed to beneficially own the 2,132,426 Ordinary Common Shares owned by Shamrock Activist Value Fund, constituting approximately 5.29% of the issued and outstanding Ordinary Common Shares. As the managing member of the General Partner, Shamrock Partners may be deemed to beneficially own the 2,132,426 Ordinary Common Shares owned by Shamrock Activist Value Fund, constituting approximately 5.29% of the issued and outstanding Ordinary Common Shares. Shamrock Partners has sole voting and dispositive power with respect to the 2,132,426 Ordinary Common Shares owned by Shamrock Activist Value Fund by virtue of its authority to vote and dispose of such Ordinary Common Shares. Finally, each of the controlling persons of Shamrock Partners may be deemed to beneficially own the 2,132,426 Ordinary Common Shares owned by Shamrock Activist Value Fund, pursuant to Rule 13d-3 under the Act. Those controlling persons are identified in response to Item 2.

The percentages set forth in this response to Items 5(a) and 5(b) assumes that 40,280,161 Ordinary Common Shares were outstanding as of March 5, 2008, as represented by the Company in its Form 10-K filed with the Securities and Exchange Commission on February 29, 2008.

---

(c) During the last 60 days, SAVF, SAVF II and SAVF III acquired Ordinary Common Shares on such dates, in such amounts and at such per share prices (excluding brokerage fees) as indicated on the Schedule of Transactions attached hereto as Exhibit 3 and incorporated herein by reference. All such transactions were effected in the open market on the NASDAQ Stock Market.

Except as set forth above, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any person identified in response to Item 2, beneficially owns any Ordinary Common Shares or has effected any transactions in Ordinary Common Shares during the preceding 60 days.

 

(d)	Not applicable.

 

(e)	Not applicable.

 

ITEM 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The Reporting Persons have no knowledge of any contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in response to Item 2 or between such persons and any person with respect to any securities of the Company.

 

ITEM 7.

Material to be Filed as Exhibits.

 

				Document
Exhibit 1		—		Reporting Persons’ Stockholder proposal regarding the declassification of the Company’s Board of Directors to be included in the Company’s Proxy Statement for 2008 Annual Meeting of Stockholders
Exhibit 2		—		Letter to the Company’s Board of Directors, dated October 22, 2007, from SCA, on behalf of the Reporting Persons, recommending that the Company make a one time $12.00 per share special dividend to Stockholders
Exhibit 3		—		Schedule of Transactions
Exhibit 4		—		Joint Filing Agreement, dated March 13, 2008, among Shamrock Activist Value Fund, L.P., Shamrock Activist Value Fund II, L.P., Shamrock Activist Value Fund III, L.P., Shamrock Activist Value Fund GP, L.L.C. and Shamrock Partners Activist Value Fund, L.L.C.

---

SIGNATURES

After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.

Date: March 13, 2008

 

---

---

Exhibit Index

 

				Document
Exhibit 1		—		Reporting Persons’ Stockholder proposal regarding the declassification of the Company’s Board of Directors to be included in the Company’s Proxy Statement for 2008 Annual Meeting of Stockholders
Exhibit 2		—		Letter to the Company’s Board of Directors, dated October 22, 2007, from SCA, on behalf of the Reporting Persons, recommending that the Company make a one time $12.00 per share special dividend to Stockholders
Exhibit 3		—		Schedule of Transactions
Exhibit 4		—		Joint Filing Agreement, dated March 13, 2008, among Shamrock Activist Value Fund, L.P., Shamrock Activist Value Fund II, L.P., Shamrock Activist Value Fund III, L.P., Shamrock Activist Value Fund GP, L.L.C. and Shamrock Partners Activist Value Fund, L.L.C.