(212) 223-2282 · Subscription Info · Legal · About Us · About Principal Management · Support / Feedback

Investor Communications Network, LLC
User Name:   Password:  
(Optional) Client: Matter:

Breaking news and more: Your media center for shareholder activism and corporate governance.

U.S. hedge fund Elliott Capital is now in the position to block South African retailer Steinhoff’s agreed takeover of Poundland, having boosted its stake in the British discount chain 22.7%, according to regulatory filings on Wednesday. Poundland shareholders will vote whether to approve the deal before an investor meeting on Sept. 7. Steinhoff, which has a 23.6% holding in Poundland, needs the support of 75% of Poundland shareholders—excluding its own stake—for the deal to go through. Given that Steinhoff has said the revised £610 million offer announced Aug. 11 was final, the deal could collapse if Elliott is angling for a higher price. Although Elliott's motivations are unknown, the hedge fund has a history of buying stakes in companies and then pushing bidders to raise their offers. The event could be a setback for Steinhoff, which warned on Wednesday that a fall in the pound after Britain's vote to leave the European Union could hurt its U.K. business.

U.S. network security firm Infoblox Inc. (BLOX) has reportedly initiated a sale process after receiving buyout interest from private equity firms and coming under pressure from Starboard Value LP. Sources said this week that Thoma Bravo LLC, which had contacted the company earlier this year about a potential acquisition, is one of the buyout firms participating in an auction for Infoblox. The sources said no deal is certain. Starboard, which revealed a 7.1% stake in April, said the company's shares were undervalued and represented an attractive investment opportunity. Starboard also said it could engage in dialogue with Infoblox about possible transactions. Santa Clara, Calif.-based Infoblox, which helps companies automate their information technology networks and protect them from cyberattacks, has said that weakness in information technology spending in the tech industry has hindered its performance. If Infoblox agreed to sell to a buyout firm, it would be the latest in a string of business software companies to go private this year, often after facing criticism from activist investors for their poor financial performance.

Bob Evans Farms (BOBE), under pressure from Sandell Asset Management, indicated during a conference call on Wednesday that a new strategic review is underway at the company.  Bob Evans CEO Saed Mohseni claimed that "all options" are on the table when asked if he would consider splitting the company's restaurant chain business from its packaged foods unit.  Meanwhile, Tom Sandell and his Sandell Asset Management fund are engaged in a three-year public fight to have Bob Evans split or spin off the unit, BEF Foods.  Mohseni's answers may not be enough for the shareholder, who reportedly believes that BEF Foods on a standalone basis could be valuable to a number of potential buyers.  On the analyst call, Sandell questioned the transaction timeline and unsuccessfully sought to have Bob Evans reveal the name of its financial advisers.  The name of the advisers could help determine whether a separation is seriously being considered.  It is possible Sandell may step up his campaign, given the lack of clarity around the strategic review and its timeline. Bob Evans forestalled a proxy fight with Sandell in 2015 by agreeing to one of Sandell's demands; and Sandell installed a minority slate of four dissident directors to Bob Evans' board in 2014.

After walking away from a potential $23 billion buyout of Hershey Co. (HSY), embattled snack giant Mondelez International Inc. (MDLZ) may face renewed pressure to join with another larger competitor. Mondelez is pursuing $3 billion in cost cuts by 2018, but activist investors have been angling for a more transformative strategy. Although CEO Irene Rosenfeld said on Monday that Mondelez may still pursue its own acquisitions, analysts believe the most likely scenario is a takeover by a bigger food giant such as Kraft Heinz Co. (KHC). Mondelez shares rose on the news that the Hershey deal was dead—indicating that investors saw the Hershey transaction as an obstacle to a more favorable Mondelez-Kraft Heinz combination, one analyst suggested. Bill Ackman took a large holding in Mondelez last year and pressed Rosenfeld to improve the company's performance, as its profit margins have lagged those of food-industry rivals.

Despite encouragement from Starboard Value, Macy's (M) has been slow to make money from its valuable brick-and-mortar buildings. Its reluctance has prompted intervention from the Securities and Exchange Commission, which on Friday released correspondence asking why the retailer keeps discussing the importance of monetizing real estate but does not adequately detail real-estate sales in its financial filings. Instead of listing property sales as real-estate gains in a separate line item on its income statement, the agency noted, Macy's has been accounting for such sales by slashing its selling, general, and administrative expenses—giving investors the impression that it is reducing its overhead rather than simply unloading real estate. Meanwhile, it has been more than a year since Starboard first suggested that Macy's take half its stores and form a separate joint venture with a mall operator, ultimately using cash from property sales to repurchase stock, pay down debt, or reinvest in its business. Since then, Macy's stock has fallen by 44%; and investor frustration is rising. Although Macy's recently said it would close about 14% of its stores, the company could command more for its brick-and-mortar buildings—which Starboard Value says are worth at least $21 billion.

German investor Shareholder Value Management and Swiss fund Lakestreet Capital Partners are pushing aviation services and distribution provider John Menzies to break up its two businesses. The two investors together own 10% of the Scottish company. Shareholder Value, which bought its 7% stake in July, said its analysis showed that a reorganization of the corporate structure would benefit both shareholders and the pension scheme. “Holding on to the current flawed corporate structure will most likely lead to continued decreasing profitability at John Menzies plc,” said Gianluca Ferrari, analyst at the investment house. “Shareholder Value has conducted a very detailed analysis of the process of splitting John Menzies plc and the effect on the John Menzies Pension Scheme,” he added. “We concluded that John Menzies plc can, and in fact should, be split in a way that will protect the pension scheme’s covenant.” In John Menzies’ annual report, chair Dermot Smurfit said a review of the company’s structure will examine whether the two businesses are best placed to thrive while together or apart.

In an unusual maneuver, BlackRock Inc. withheld support from two Exxon Mobil Corp. (XOM) directors at the energy firm's shareholder meeting. BlackRock funds have stood with corporate directors about 97% of the time since 2013, according to Proxy Insight. But according to securities filings on Friday, they declined to support Exxon directors Jay Fishman and Kenneth Frazier at the May 25 meeting. The two were re-elected with 88% and 90% of votes cast, respectively, down from 95% and 98% in 2015. BlackRock appears to be motivated by disagreement with Exxon's board communications policy, which dictates how much contact independent directors should have with outsiders. In a recent governance report on its website, it describes how BlackRock executives attempted to discuss strategy and capitol allocation with independent directors of an unnamed company but were snubbed because of a policy against such talks. BlackRock is Exxon's second-largest shareholder, with about 6% of its stock.

Abstract News © Copyright 2016 INFORMATION, INC.

Show More
Investors Sour on Activists but Won’t Shift Strategy
" Financial Times (08/26/16)"

According to a Preqin survey, 100% of institutional investors said performance by activist strategies fell below their expectations in the first half of this year; but only 9% intend to decrease their exposure to the strategy. “Performance, along with fees, looks set to be a key driver of change in the industry over the rest of 2016,” said Amy Bensted, the group’s head of hedge fund products. Hedge fund managers are hoping the improved performance between March and July “may help win back the favor of investors, and help the industry gain fresh capital inflows in the second half of the year.” According to Preqin, activist strategies lost investors 5.6% from July last year to this past June. Although activists have generated 4.1% year to date compared with 3.7% for all hedge fund strategies, activist strategies have gained only 0.7% over the past 12 months, compared with 1.6% for the broader sector, Preqin data show. Public sentiment toward hedge funds has also turned in recent quarters: investors withdrew a net $34 billion from the hedge fund industry in the first half of the year, Preqin estimates.

Web Link
Dealpolitik: Dissecting Corvex's Novel Approach to Williams Board Fight
" Wall Street Journal (08/24/16) Barusch, Ronald"

Keith Meister's approach at pipeline company Williams (WMB)—nominating 10 employees of his own firm to meet Thursday's director-nomination deadline—is an uncommon one, but it just might let him dodge the company's bylaws.  Corvex Management LP says its employees, if elected, would immediately name “world class board members” to replace themselves and then promptly resign.  If Williams wanted to dispute the validity of Corvex's nominations, it could argue that the placeholder nominees are not consenting to “serve” if they intend to resign soon after being elected.  But Williams' bylaws do not specify that nominees state intent to serve their full term.  Although Corvex's move would likely have little applicability to other companies—which will probably now adjust their bylaws to prevent the tactic—it is probably too late for Williams.  The company may be better off extending the nomination deadline and letting Corvex formally nominate the “world class” nominees, rather than risk adverse shareholder reaction by barring Corvex from making any nominations this year.

Web Link
Abenomics' Third Arrow Spurs Dan Loeb and Others to Shake Up Japan
" Institutional Investor (08/22/16) Delaney, Jess"

Foreign shareholder activists have for decades found little success in Japan but, partially due to the corporate governance reforms of Prime Minister Shinzo Abe, they now are experiencing unprecedented success. Third Point founder and CEO Dan Loeb, for example, has been campaigning for greater shareholder returns in Japan since 2013 and has acquired holdings in robot maker Fanuc Corp., Suzuki Motor Corp., IHI Corp., and Sony Corp. “We effectively give them a dare-to-be-great speech that connects them to the principles around governance that their own government has articulated as part of the third arrow strategy,” Loeb says. “It's subtle, but I think it's more palatable because the companies don't have to do something that an outsider wants them to do; they are following the leadership of their own government.” Abe's reforms aim to drive greater corporate discipline and push boards to show more concern for shareholders, and Japan is starting to mend its ways. In October 2015, Loeb announced the hedge fund firm had taken a stake in Seven & i Holdings Co. and ultimately scored a rare victory after invoking the corporate governance code in an open letter to the board. The success was hailed in the Japanese media as the beginning of a new era in corporate governance.

Web Link
In Praise of Hedge Funds: Why Short-Term Activists Create Long-Term Value
" City A.M. (08/16/16) Edmans, Alex"

Activist hedge funds often get a bum rap, but academic research examines "all the evidence" and presents a more positive view, writes Alex Edmans, a professor of finance at London Business School. A decade of research led by professors at Duke University and Columbia University shows that activist hedge funds create value in both the short term and in the long run. The pivotal study found that activism boosts company value 7%, with no long-term reversal, while also improving operating performance and payout to investors. CEO turnover also rises. A second paper investigated the source of the increase in operating performance. It found that productivity climbs in plants sold by hedge funds, suggesting that they drive reallocation of assets to buyers that can make better use of them. The professors' newest paper studies innovation, finding that hedge funds do cut R&D. However, despite lower innovation input, it actually improves in terms of both the number and quality of future patents, the authors found. Ultimately, "investment is absolutely critical for the twenty-first century firm," Edmans concludes.

Web Link
ValueAct Says ‘More Please’ at Morgan Stanley
" Wall Street Journal (08/16/16) Back, Aaron"

ValueAct Capital Management’s $1.1 billion investment in Morgan Stanley (MS) could imply a wider shift in investor attitudes toward major banks. The investor’s vote of confidence is unusual in a few ways, however: ValueAct is not driving major changes in strategy or management, and has rather stood by CEO James Gorman and his strategy. Activists—especially those investing in embattled financial companies—typically focus on what should be slashed or discontinued. Yet Morgan Stanley already has been through a sweeping restructuring, and the fact that activists are now focusing on what areas could do well marks something of a crossroads. ValueAct singled out advisory and wealth management for praise, and could be seen to be encouraging more investment in those business lines. That is consistent with Gorman’s current strategy, because these are less risky than trading to market activity and gives the bank more control. Gorman's plan to reach a return on equity of around 10% by next year is largely on schedule, and ValueAct's investment suggests that it believes Morgan Stanley can hit its target. If so, this will be a very positive sign for the bank and its peers.

Web Link

Abstract News © Copyright 2016 INFORMATION, INC.

Show More

Company Search

Company SearchInsert a ticker and see updated financial quote summary, company description and detailed information on any live or recently exited activist campaigns, including the activist’s investment thesis. This feature takes you chronologically through the activist’s 13D filings detailing increases or decreases in holdings and change in average cost per share and summarizing any activist measures taken. Additionally, the chart at the bottom of the page shows the stock price performance and its reaction to each 13D filing. For quick reference, there are links to the activist’s profile and returns history and any letters and agreements the activist has entered into in connection with this investment.

Activist Profile

Activist Profile View a detailed analysis of the activist histories of the 40+ top activists – updated and expanded on a continuous basis. Get detailed analysis on: (i) the returns for each activist investor, including: (A) which activists have outperformed the S&P500 on their individual and aggregated 13D filings, (B) how their returns on live filings compare to their returns on exited filings, and (C) how their returns on filings change when they take significant activist measures; (ii) the average holding periods for each activist investor on all filings, exited filings, live filings and filings where they have taken significant activist measures; and (iii) what activist measures were taken, when they were taken and how the underlying stock reacted to the filing.

Last month’s Activist Report

Standstill Agreement Analysis

Search Activist Campaigns

Search live and exited filings by Investor, Dates, Market Caps, Industry and Type of Activism (i.e., Proxy fights for board seats, Posion pill issues, Spinoff, etc.). Sort results by date, investors, return on investment, etc. Easy access to link to detailed analysis of activist campaign and any letters or agreements entered into in connection therewith.

Search 13D Monitor Archive

Search FilingsSearch our list of historical 13D Monitor filings. The list contains approximately 4.000 material filings since 2006 and also includes the associated report.

Activist Letters and Agreements

Search our library of activist letters and agreements to find letters sent by activists to Companies, Settlement Agreements, Standstill Agreements, etc. Search this library by filer, company, type of letter or agreement, or any combination thereof.

"Users of this website understand and agree that 13DMonitor.com (“Provider”) does not recommend any security, financial product or instrument, nor does any mention of a particular company in this website or anywhere in the Provider service constitute a recommendation by Provider to buy, sell, or hold that or any other company discussed therein. Users understand and agree that Provider also does not offer or provide any investment advice or opinion regarding the nature, potential, value, suitability or profitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Users also understand and acknowledge that Provider provides no tax, legal or investment advice, nor does it recommend or make referrals to any persons or entities who provide investment advice. Users also understand and agree that by accessing this website or participating in the Provider service, any information provided therein is not to be used or considered as an offer, or a solicitation of an offer, to buy or sell securities by Provider. Users understand and agree that Provider only distributes information about shareholder activism and notable 13D filings, and such information is not intended to cause user to buy, sell, or hold securities of any company discussed therein. Users also understand and acknowledge that Provider employees are not authorized to give any legal, tax, investment or other advice. Users acknowledge that Provider is not, and user’s access to information through the Provider service will not, cause Provider to be an investment adviser with respect to user."
152 West 57th Street, 41st Floor
New York, NY 10019
Phone: +1 (212) 223-2282
E-mail: info@icomm-net.com
Investor Communications Network © 2013
Legal · About Us · About Principal Management · Subscribe · Support / Feedback