Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Avy2XZOh2UnVss7yHYaWmIvQyknDJyGMAdTXfvy5deC721MZ7dw5M7umHxNtB9r5 uJf+yuGRcW23Ixy2jlU2SQ== 0001193125-08-057590.txt : 20080314 0001193125-08-057590.hdr.sgml : 20080314 20080314171946 ACCESSION NUMBER: 0001193125-08-057590 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20080314 DATE AS OF CHANGE: 20080314 GROUP MEMBERS: SHAMROCK ACTIVIST VALUE FUND GP, L.L.C. GROUP MEMBERS: SHAMROCK ACTIVIST VALUE FUND II, L.P. GROUP MEMBERS: SHAMROCK ACTIVIST VALUE FUND III, L.P. GROUP MEMBERS: SHAMROCK PARTNERS ACTIVIST VALUE FUND, L.L.C. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAGELLAN HEALTH SERVICES INC CENTRAL INDEX KEY: 0000019411 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 581076937 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-12251 FILM NUMBER: 08690388 BUSINESS ADDRESS: STREET 1: 6950 COLUMBIA GATEWAY STREET 2: STE 400 CITY: COLUMBIA STATE: MD ZIP: 21046 BUSINESS PHONE: 4109531000 FORMER COMPANY: FORMER CONFORMED NAME: CHARTER MEDICAL CORP DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Shamrock Activist Value Fund L P CENTRAL INDEX KEY: 0001306697 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 4444 LAKESIDE DR CITY: BURBANK STATE: CA ZIP: 91505 BUSINESS PHONE: 818-973-4444 MAIL ADDRESS: STREET 1: 4444 LAKESIDE DR CITY: BURBANK STATE: CA ZIP: 91505 FORMER COMPANY: FORMER CONFORMED NAME: Shamrock Governance Fund LP DATE OF NAME CHANGE: 20041021 SC 13D 1 dsc13d.htm SCHEDULE 13D Schedule 13D

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


SHAMROCK ACTIVIST VALUE FUND, L.P.
By:		Shamrock Activist Value Fund GP, L.L.C., its general partner

By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell
		Title: Vice President

SHAMROCK ACTIVIST VALUE FUND II, L.P.
By:		Shamrock Activist Value Fund GP, L.L.C., its general partner

By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell
		Title: Vice President

SHAMROCK ACTIVIST VALUE FUND III, L.P.
By:		Shamrock Activist Value Fund GP, L.L.C., its general partner

By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell
		Title: Vice President


SHAMROCK ACTIVIST VALUE FUND GP, L.L.C.
By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell
		Title: Vice President

SHAMROCK PARTNERS ACTIVIST VALUE FUND, L.L.C.

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell
		Title: Vice President

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.

EX-1 2 dex1.htm REPORTING PERSONS' STOCKHOLDER PROPOSAL Reporting Persons' Stockholder proposal

Exhibit 1

Shareholder Resolution Requesting Declassification of the Board of Directors

“RESOLVED, Magellan’s stockholders request that the Board of Directors take necessary actions to declassify the Board of Directors and institute annual elections of all directors promptly. This policy, if implemented, would not affect the unexpired terms of directors previously elected.”

Supporting Statement for Stockholder Proposal

to Declassify the Company’s Board of Directors

Shamrock Activist Value Fund believes Magellan’s corporate governance practices directly affect its financial performance and investor confidence in the company. We believe it is in the best interest of Magellan stockholders that Magellan embrace the good governance practice of annual director elections.

Shamrock Activist Value Fund believes that a fundamental tenet of corporate governance is that Directors be held accountable for their performance and the performance of the executives they appoint. We therefore have proposed a stockholder resolution urging the Board to take all necessary steps to declassify Magellan’s Board and promptly implement annual Director elections. If the Board follows the recommendations in our proposal, new Directors would stand for election for a one year term, and incumbent directors would have to stand for election for a one year term after their current terms expire.

Magellan’s Board of Directors is currently divided into three classes, each elected for a three-year term. As a result, in any given year Magellan’s stockholders are effectively disenfranchised from one of their most important rights as to two-thirds of the Board of Directors - namely, deciding whether those Directors and the executives they have chosen have performed well enough to warrant

re-election.

Shamrock Activist Value Fund believes annual Director accountability will strengthen the company financially. Corporations that demonstrate effective corporate governance and accountability often outperform their peers. We believe that is why a majority of companies in the S & P 500 no longer have classified Boards, and why declassification proposals have become increasingly common and overwhelmingly approved by public company stockholders in recent years.

Respected governance experts such as Institutional Shareholder Services and the Council of Institutional Investors also strongly recommend declassified Boards. Put simply, Magellan’s classified Board is out of step with best practices, and by adhering to that structure Magellan is swimming against the prevailing tide to its stockholders’ detriment.

Advocates of classified boards argue that entrenched directors offer continuity, experience and protection against takeovers. But at what cost? We believe Magellan stockholders are focused on long-term stockholder value and will not entrust their investment to inexperienced or ineffective directors, nor would they support a takeover at an inadequate price. Conversely, we believe Directors who are only accountable to the stockholders every third year have less incentive to consistently perform, because their positions are rarely at risk. Further, we believe entrenched Boards discourage attractive takeover offers and proxy contests to replace inefficient Directors and management, due to the significant cost and time required, notwithstanding that those actions might be in the clear best interests of Magellan’s stockholders.

Shamrock Activist Value Fund believes no competent Director should fear annual elections, and Directors should be accountable annually to the stockholders who elected them.

If you agree with us, please vote for this proposal.

EX-2 3 dex2.htm LETTER TO THE COMPANY'S BOARD OF DIRECTORS Letter to the Company's Board of Directors

Exhibit 2

Shamrock Activist Value Fund Recommends Magellan Health Services, Inc.

(Nasdaq:MGLN) Declare $12.00 Per Share Special Dividend

October 22, 2007

Board of Directors

Magellan Health Services, Inc.

c/o Mr. Steven Shulman

Chairman and Chief Executive Officer

55 Nod Road

Avon, Connecticut 06001

Dear Directors,

Shamrock Activist Value Fund currently owns 1,822,878 shares of Magellan Health Services, Inc. (Nasdaq:MGLN) (the “Company”) common stock or approximately 4.6% of its outstanding shares, which places our fund among the largest owners of the Company. We have been shareholders of Magellan since January 2006 and have spent considerable time researching the Company, its industry, and its competitors.

Until recently, we had been supportive of management’s strategy to pursue acquisition opportunities that seek to capitalize on the Company’s core competency in healthcare administration in a managed care environment. With the acquisitions of NIA and ICORE at a cost of $408 million over the last 18-months, we believe it is now appropriate for management and the Company to focus primarily on successfully integrating these two businesses. Early indications suggest NIA is roughly tracking to plan and ICORE’s performance is lagging acquisition projections. We find it reasonable for shareholders to expect financial results that demonstrate that the Company’s strategy is one that can create value for shareholders. Until that time, we believe it imprudent for the Board to endorse additional acquisition activity.

We believe that the Board has the opportunity to dramatically improve shareholder value by taking immediate action to optimize the Company’s balance sheet. The Company’s current forecast projects $12 million of debt and approximately $315 million of unrestricted cash at year end. Moreover, management indicated on the July 27 conference call that it has access to approximately $1.25 to $1.50 billion of capital from cash on hand and available debt capacity. We agree with management’s assessment. Clearly, Magellan has the financial flexibility to add reasonable leverage to its balance sheet, return a portion of its excess capital to shareholders, while retaining adequate liquidity to pursue opportunistic acquisitions. Therefore, we recommend that the Board should authorize a one-time special dividend of $478 million or approximately $12.00 per share.

Enclosed for your review is a brief summary of the proposed transaction. A copy of this presentation can be found on our website at (www.shamrock.com/pages/activist/MGLN_Dividend_Recap.pdf).

Based on our conversations with shareholders that represent approximately 50% of outstanding shares of the Company, we believe that a return of excess capital at this time would be well received. While some of these shareholders may differ on a preferred method for returning capital (namely, special dividends vs. share repurchases), all agree that the current balance sheet is sub-optimal and is suppressing shareholder returns.

Over the last few months we have had multiple discussions with Company management about capital management. We were initially encouraged by management’s comments on the April 27, 2007 conference call:

“…acquisition opportunities are the first, second and third agenda items in terms of capital deployment to maximize shareholder value. However, we are considering ways to make the balance sheet more efficient, given the pipeline of acquisition opportunities and the inefficiency of the balance sheet.”

Three months later, on their July 27, 2007 conference call, management’s tone and message changed:

“We believe it is prudent to maintain our current capital position. In addition, as Mark has just discussed, our cash needs for the business are fairly significant in ‘07. Given the current incremental usage of cash for a new business and our active acquisition review, we have decided at this point in time not to implement any capital deployment strategies this quarter but we will continue to review and assess this possibility on an ongoing basis as we have stated to you previously.”

Given the Board’s decision to take no action with respect to capital management, we requested on August 9^th and again via a letter to the Board of Directors on September 18^th , to meet with one or all of the independent Board members to share our analysis and thoughts. We have been disappointed by the Board’s decision to not meet and engage with us in a discussion concerning this issue. Given the lack of response and what we believe is an ongoing risk factor and drag on the Company’s valuation, we are left with no choice but to make our concerns public.

We again request a meeting with any or all of the independent Board members to discuss this important issue at Magellan.

Respectfully,

/s/ Arik Ahitov

Arik Ahitov

EX-3 4 dex3.htm SCHEDULE OF TRANSACTIONS Schedule of Transactions

Exhibit 3

Schedule of Transactions

Shamrock Activist Value Fund, L.P.


Date	Number of Ordinary Common Shares	Price Per Ordinary Common Share in $US*		Total Purchase Price
02/08/08	8,379	$	43.1094	$	361,214
02/11/08	8,379	$	42.6742	$	357,567
02/12/08	8,379	$	42.8265	$	358,843
02/13/08	3,825	$	43.1228	$	164,945
02/14/08	1,138	$	43.2184	$	49,183
02/15/08	11,143	$	43.1271	$	480,565
02/19/08	691	$	43.4818	$	30,046
02/20/08	4,272	$	43.4119	$	185,456
02/22/08	3,687	$	43.4568	$	160,225
02/26/08	20,276	$	43.0808	$	873,506
02/27/08	25,136	$	42.8754	$	1,077,716
02/28/08	18,852	$	42.1583	$	794,768
02/29/08	6,955	$	43.4929	$	302,493
03/03/08	25,136	$	41.8497	$	1,051,934
03/04/08	12,567	$	41.6249	$	523,100
03/05/08	12,567	$	41.3345	$	519,451
03/06/08	12,567	$	40.9111	$	514,130
03/07/08	12,567	$	40.5033	$	509,005
03/10/08	12,567	$	40.0758	$	503,633
03/11/08	12,567	$	38.4550	$	483,264
03/12/08	12,567	$	38.1873	$	479,900
03/13/08	25,136	$	38.6684	$	971,969

Total	259,353			$	10,752,913

Shamrock Activist Value Fund II, L.P.


Date	Number of Ordinary Common Shares	Price Per Ordinary Common Share in $US*		Total Purchase Price
02/08/08	1,616	$	43.1094	$	69,665
02/11/08	1,616	$	42.6742	$	68,962
02/12/08	1,616	$	42.8265	$	69,208
02/13/08	738	$	43.1228	$	31,825
02/14/08	220	$	43.2184	$	9,508
02/15/08	2,150	$	43.1271	$	92,723
02/19/08	133	$	43.4818	$	5,783
02/20/08	825	$	43.4119	$	35,815
02/22/08	711	$	43.4568	$	30,898
02/26/08	3,912	$	43.0808	$	168,532
02/27/08	4,849	$	42.8754	$	207,903
02/28/08	3,637	$	42.1583	$	153,330
02/29/08	1,341	$	43.4929	$	58,324
03/03/08	4,849	$	41.8497	$	202,929
03/04/08	2,425	$	41.6249	$	100,940
03/05/08	2,425	$	41.3345	$	100,236
03/06/08	2,425	$	40.9111	$	99,209
03/07/08	2,425	$	40.5033	$	98,221
03/10/08	2,425	$	40.0758	$	97,184
03/11/08	2,425	$	38.4550	$	93,253
03/12/08	2,425	$	38.1873	$	92,604
03/13/08	4,849	$	38.6684	$	187,503

Total	50,037			$	2,074,555
Shamrock Activist Value Fund III, L.P.
Date	Number of Ordinary Common Shares	Price Per Ordinary Common Share in $US*		Total Purchase Price
02/08/08	5	$	43.1094	$	216
02/11/08	5	$	42.6742	$	213
02/12/08	5	$	42.8265	$	214
02/13/08	2	$	43.1228	$	86
02/14/08	1	$	43.2184	$	43
02/15/08	7	$	43.1271	$	302
02/20/08	3	$	43.4818	$	130
02/22/08	2	$	43.4119	$	87
02/26/08	12	$	43.4568	$	517
02/27/08	15	$	43.0808	$	643
02/28/08	11	$	42.8754	$	464

Shamrock Activist Value Fund III, L.P.


Date	Number of Ordinary Common Shares	Price Per Ordinary Common Share in $US*		Total Purchase Price
02/29/08	4	$	42.1583	$	174
03/03/08	15	$	43.4929	$	628
03/04/08	8	$	41.8497	$	333
03/05/08	8	$	41.6249	$	331
03/06/08	8	$	41.3345	$	327
03/07/08	8	$	40.9111	$	324
03/10/08	8	$	40.5033	$	321
03/11/08	8	$	40.0758	$	308
03/12/08	8	$	38.4550	$	305
03/13/08	15	$	38.1873	$	580

Total	158	$	38.6684	$	6,546

*	Excludes Brokerage Commissions

EX-4 5 dex4.htm JOINT FILING AGREEMENT Joint Filing Agreement

Exhibit 4

AGREEMENT

JOINT FILING OF SCHEDULE 13D AND ALL FUTURE AMENDMENTS TO SCHEDULE

13D

Each of the undersigned hereby agrees to file jointly the Statement on Schedule 13D to which this Agreement is attached, and any amendments to the Statement on Schedule 13D (the “Schedule 13D”) with respect to Ordinary Common Shares of Magellan Health Services, Inc. which may be deemed necessary, pursuant to Regulation 13D under the Securities Exchange Act of 1934.

It is understood and agreed that each of the parties hereto is responsible for the timely filing of such statement and any future amendments to the Schedule 13D, and for the completeness and accuracy of the information concerning such party contained therein, but such party is not responsible for the completeness or accuracy of information concerning any other party unless such party knows or has reason to believe that such information is inaccurate.

It is understood and agreed that a copy of this Agreement shall be attached as an exhibit to the Statement on the Schedule 13D, and any future amendments to the Schedule 13D, filed on behalf of each of the parties hereto.

Date: March 13, 2008


SHAMROCK ACTIVIST VALUE FUND, L.P.
By:		Shamrock Activist Value Fund GP, L.L.C., its general partner

By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell Title: Vice President


SHAMROCK ACTIVIST VALUE FUND II, L.P.
By:		Shamrock Activist Value Fund GP, L.L.C., its general partner

By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell Title: Vice President

SHAMROCK ACTIVIST VALUE FUND III, L.P.
By:		Shamrock Activist Value Fund GP, L.L.C., its general partner

By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell Title: Vice President

SHAMROCK ACTIVIST VALUE FUND GP, L.L.C.
By:		Shamrock Partners Activist Value Fund, L.L.C., its managing member

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell Title: Vice President

SHAMROCK PARTNERS ACTIVIST VALUE FUND, L.L.C.

By:		/s/ Michael J. McConnell
		Name: Michael J. McConnell Title: Vice President

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