Daniel Loeb's Third Point nearly halved its stake in PDL BioPharma (NDAQ:PDLI) according to a Schedule 13D/A filing with the SEC. The move comes after the biopharmaceutical company bended to the demands of the activist shareholder by announcing that it would actively seek a sale of the entire company.

"We are encouraged by PDL's October 1st press release announcing that the Board will actively seek the sale of the entire Company or all of its component pieces," said Daniel Loeb in a letter to the board. "We are also pleased with the progress apparently being made by the Merrill Lynch investment bankers in spear heading this process and advancing it expeditiously to a successful conclusion."

Third Point, which now holds a 5.1% stake in the company, said in its letter to the board of directors that it was encouraged positive developments related to the company's intentions to conduct a sales process but expressed concern that the board doesn't include a Third Point representative and is being led by Mr. Gage as an interim chief executive.

"Despite these positive developments, we are disappointed that the sale process is still being led by a Board that does not include a Third Point representative, and that Patrick Gage remains the Company's CEO, despite having demonstrated his unsuitability," said Daniel Loeb. "Accordingly, although we remain convinced that PDLI shares are undervalued, and that a sale will maximize shareholder value, in light of your continuing refusal to provide us with a voice in the Company's affairs through a Board seat, we have reduced our position."

In the end, a sale process is great news for all shareholder but the fact that Third Point nearly halved its position in the company could prove to be a sign that a sale is not a gaurantee at this point. As a result, shareholders should be very prudent at this point and perhaps hedge their positions with options as we sit on this buyout premium. Combined, these factors make PDLI a stock worth watching!

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