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Van Eck Urges Sale Process for Embattled Miner Detour Gold
" Bloomberg (07/20/18) Deveau, Scott"

Detour Gold Corp.'s (DGC) top shareholder with a 12.5% stake has expressed support for Paulson & Co.'s campaign to get the company to sell itself. The best way to unlock the Toronto-based gold miner's value would be to run a full sales process, said Joseph Foster, a portfolio manager at Van Eck Associates Corp. “Detour has had a history of a number of failures,” he said. The company's low level of disclosure to shareholders makes it difficult to do an analysis of Detour's underlying value, but “a logical way to get those answers for us is to have this process and let other companies look at Detour with their teams of geologists and see if they see value there,” he said. Detour has rebuffed calls to run a sales process, but said it would consider any strategic alternative that would create more value for shareholders than its own plans. The company said Friday its special committee is constantly reviewing those alternatives, and announced plans to appoint two new board members in the near future. However, Foster said the measures fall short of the full strategic review he would like to see. Another stockholder, Coast Capital Management, which has also called for a sale, said moves announced Friday were “half measures.” Detour reportedly asked Barrick Gold Corp. (ABX) to sign a confidentiality agreement with Paulson earlier this month to grant them access to their books to evaluate a possible buyout, but either Paulson nor Barrick signed the agreement.

Hammerson Poised to Announce Asset Sales This Week
" Financial Times (07/22/18)"

Hammerson is set to unveil a new strategic plan Tuesday, including a program of asset sales, as it seeks to soothe shareholders following a failed attempt to purchase its biggest competitor. The embattled U.K. shopping center landlord also faces intervention by Elliott Management, which has used derivatives to acquire a more than 5% stake in the group. Hammerson and its CEO David Atkins face pressure to sell assets in order to return value to shareholders and prove the book valuations of its portfolio, with its shares trading at a steep discount. Hammerson has been in talks to sell a stake in the Highcross shopping centre in Leicester and has said it is weighing disposals more broadly as part of its “options to accelerate the delivery of value for shareholders.” It is also reconsidering plans for big capital expenditure. If asset sales are successful, Hammerson plans to return cash to shareholders, possible through share buybacks, though analysts said it would need to ensure its loan-to-value ratio remained stable. In April, Hammerson withdrew a proposal to buy rival Intu as the retail climate deteriorated. One shareholder, APG, had gone public with its “substantial concerns” about the all-share offer, which it said was “insufficiently attractive” to shareholders. At the same time, Hammerson rebuffed two takeover approaches from France’s Klépierre. It now faces pressure to show how it can generate more value ahead of October, when Klépierre could potentially return with a new bid.

GSK Board Considers Break-up of Group
" Financial Times (07/20/18) Neville, Sarah; Mooney, Attracta"

GlaxoSmithKline Plc (GSK) is considering a break-up of the company as top investors urge the board to spin off its consumer division. One of the company's top 10 shareholders says it has had discussions with GSK Chairman Philip Hampton, noting that "the logic of [splitting] the business is pretty clear ... The financial dynamics of consumer and pharma are pretty different." The shareholder praised CEO Emma Walmsley, who has been in the position since last April, calling her "very good" and "determined." But, the investor said, shareholders "don't quite believe in the company." The company's "3 business structure" of pharma, vaccines, and consumer offers "significant opportunities," the company said Friday in a statement, but is subject to each "continuing to perform competitively and having access to capital." GSK said the consumer business has good growth prospects and could see operating margins in the "mid-20s percentages" by 2022.

Final Call for Passport Boss as Hedge Fund Warns De La Rue's CEO: Adapt or Be Taken Over
" Daily Mail (United Kingdom) (07/22/18) Oliver, Matt"

Crystal Amber reportedly has upped its stake in British passport and banknote maker De La Rue from 3.1% to 4% ahead of the company's annual general meeting on Thursday. The fund is urging De La Rue's management to compose a strategy that will prepare it for the future by focusing more on selling its technology. The company's shares have plummeted after it lost the contract to make Britain's blue passports post-Brexit to a French rival earlier this year. Some investors have declared that CEO Martin Sutherland is "on probation" and must urgently detail how he plans to revitalize the company's fortunes. He is seen to have been weakened by what investors consider the disastrous handling of the passport deal. Richard Bernstein, a manager at Crystal Amber, said De La Rue's traditional sources of income were under threat because of the digital revolution. But he said it could still succeed as an independent company if it instead focused on growing markets it already has a foothold in, such as selling cutting-edge technology it has developed for banknote security and product authentication methods. He warned that a failure to adapt would leave it open to hostile takeover by foreign predators. Crystal Amber is De La Rue's eighth-biggest shareholder.

Barrick Gold Is the Undisclosed Bidder for Detour Gold
" Bloomberg (07/20/18) Deveau, Scott; Bochove, Danielle"

Sources say Barrick Gold Corp. (ABX) is the undisclosed gold miner that was asked to sign a confidentiality agreement along with investor John Paulson to discuss potentially buying Detour Gold Corp. However, the sources note that neither party signed the agreements, and that Paulson previously held discussions about Detour with Barrick, whose level of interest in Detour is unclear. Paulson's hedge fund, Paulson & Co., is embroiled in a dispute with Detour and is pressuring the miner to sell itself. On July 19, Paulson said it plans to call a special shareholder meeting to replace most of Detour's board. In a statement on July 20, Detour said it planned to announce two new directors with operational expertise in large-scale open pit mining and corporate social responsibility, and it will remain open to strategic alternatives that create greater value than its own current plans. According to TD Securities Inc. analyst Daniel Earle, "With respect to Paulson's effort to replace the board of directors with a new slate that would pursue strategic alternatives, we believe that Paulson has the votes to requisition a shareholder meeting. We do not believe that a dissident group will have sufficient votes to be successful."

RELEVANT ARTICLES

'Medical Check-Ups': Japan Firms Tap Banks for Advice as Activists Circle
" Reuters (07/19/18) Wilson, Thomas; Tomisawa, Ayai"

Japanese companies are increasingly hiring investment banks and public relations firms for advice on dealing with activist investors. Among those advising boards on how to engage such investors are Morgan Stanley and Bank of America Merrill Lynch. Japan was the top destination in Asia for activist campaigns last year, according to a report by JP Morgan, with investors focusing on low valuations and cross-shareholdings in the country. The growing number of firms seeking advice shows a shift is underway in Japan's attitude toward activists, from one of resistance to legitimate engagement. “It is like a regular medical check-up: we do it regularly for Japanese clients even before they are approached by an activist,” said Akihiko Manaka, head of Japan mergers and acquisitions at Bank of America Merrill Lynch. “We offer Japanese clients analysis to look at the industry benchmark in terms of financial statistics as well as corporate governance and shareholding structure.” A sense that executives are more prepared to listen is encouraging more activists to enter the scene, analysts said. And emboldened by the government's governance push, activists have become increasingly vocal in their demands for change. Seth Fischer, founder of Oasis Management, has over the past 18 months used more public tactics to push companies for change. “Every engagement starts soft but if we don't get meaningful dialogue, we escalate to writing letters, then setting up websites and maybe going as far as proxies and lawsuits,” he said. “Companies are engaging more and they're asking banks to help them figure out how to address our concerns, which hopefully means they'll meet us somewhere in the middle.”

Who's Behind Blackwells Capital, a Supervalu Investor?
" Minneapolis/St. Paul Business Journal (07/18/18) Rehkamp, Patrick"

Blackwells Capital has launched blistering attacks on Supervalu (SVU) over the past several months as it tries to win control of the company's board. The New York City-based alternative investment-management company is run by 38-year-old Jason Aintabi. In an interview with the Minneapolis/St. Paul Business Journal, the CEO of Blackwells Capital described Supervalu as a very important company with totally broken leadership. "Our job here is to replace and strengthen leadership, leaders that are going to own the company and stand by it," according to Aintabi, who zeroed in on Supervalu more than a year ago. In filings, Aintabi said that if he succeeds at getting control of Supervalu's board, it is possible the company could be sold outright. Aintabi also has said he will get rid of the various hedge instruments that he holds on Supervalu should his board nominees get selected. The vote on the board slate is scheduled for Aug. 16 at Supervalu headquarters.

Investors Smell Action at Germany's Top Bet
" Wall Street Journal (07/17/18) Wilmot, Stephen"

Thyssenkrupp has lost both its chairman and CEO in recent weeks, with both men indicating that they had lost key shareholder support. Cevian, which owns 18% of the company, and Paul Singer's Elliott Management, which announced a small stake in late May, are said to have pushed for a breakup but have not publicly laid out their case. Meanwhile, the philanthropic foundation that is the German company's biggest shareholder with a 21% stake, has indicated through its chairwoman, Ursula Gather, that it wants to "preserve the unity of the company as far as possible." However, Thyssenkrupp's elevator unit could be merged with Finnish specialist Kone, and German press reports indicate that Gather met with Kone's key shareholder two years ago. The company's former management team opposed the deal, but now that they are gone, a merger could be possible, and the company's shares rose 9% on the morning of July 17 following the announcement of the chairman's resignation on July 16. Observers note that Thyssenkrupp could post substantial gains if it can bring its margins in line with peers, and more radical options may be on the table with the help of the company's investors.

Video: Could Pershing Square CEO Bill Ackman Be Making a Comeback?
" CNBC (07/16/18)"

In this video, several experts including Joe Terranova of Virtus Investment Partners, Steve Weiss of Short Hills Capital Partners LLC, Jim Lebenthal of HPM Partners, and Josh Brown of Ritholtz Wealth Management join CNBC's Leslie Picker and Scott Wapner to analyze Barron's bullish case.

The Scourge of Japan's Boardrooms Turns Peacemaker With Big Win
" Bloomberg (07/16/18) Redmond, Tom; Sano, Nao"

After years of waging activist campaigns in Japan’s boardrooms, Yoshiaki Murakami is being hailed by executives as a peacemaker. Murakami—a champion of shareholder rights before his conviction for insider trading—played a key role in the merger of refiners Idemitsu Kosan Co. and Showa Shell Sekiyu K.K. He served as a consultant to Idemitsu's founding family, whose spat with executives obstructed the deal’s progress, and convinced them to accept the integration with concessions for shareholders. So important was his intervention that Idemitsu Chairman Takashi Tsukioka publicly praised Murakami at a press conference in Tokyo last week. “I think it’s a good thing, I really do,” Murakami said of the resolution, speaking in a rare interview after years of avoiding the media. “This merger contributes to Japan’s energy security.” Idemitsu and Showa Shell shares have jumped since reports last month that the merger, first terminated nearly four years ago, was back in play. The two companies will now combine in 2019. Murakami is also likely to see a solid return on his investment in Idemitsu, though he says he only purchased stock so he could enter the talks as a fellow shareholder. Idemitsu's founding family was always looking out for the company's interests, according to Murakami, and its position was never that far from the oil refiner's. He says the firm's executives should have explained the situation better. “There was a slight misunderstanding between the company and the founding family,” he said. “I realized there was no big gap after I talked to management.”


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