Proxy Fights on Upswing, but Investors Winning Less
" Globe and Mail (09/20/18) Jones, Jeffrey"
The number of proxy fights is increasing this year as investors attempt to gain control of underperforming companies, according to Kingsdale Advisors. Year to date, Canada has had 29 proxy contests, 13 of which have yet to be decided, according to the advisory firm, which advises both investors and boards that defend against such campaigns. By this time in 2017, there had been 21 public contests and there were 32 in the full year. Investors have been successful in reaching their objectives 50% of this time this year, down from 63% in 2017, the firm said. Meanwhile, in the United States, the investors have come out the winners 72% of the time, Kingsdale said.
Smith & Wesson Director’s Outside Board Seats Spur Ouster Call
" Bloomberg (09/21/18) Weinberg, Neil; Mosendz, Polly"
Mitchell Saltz's multiple director roles at gun and security companies has spurred protests as he seeks re-election at American Outdoor Brands Corp. (AOBC), the parent company of gunmaker Smith & Wesson. At the center of the conflict is a decision by American Outdoor to halt training courses for police officers and soldiers. Shortly afterward, VirTra Inc. (VTSI)—where Saltz is also a director and investor—gained several contracts for its technology-based training service. It is unknown if Saltz was involved in American Outdoor's decision to scale back its training operations. But Glass Lewis & Co. is recommending shareholders vote against Saltz at the company's annual meeting on Sept. 25, saying he is compromised by his failure to disclose his role at VirTra to American Outdoor shareholders. While Institutional Shareholder Services Inc. is not recommending Saltz's removal, it argues that Saltz does not qualify as an “independent” director as the company claims, because he was the CEO of American Outdoor's predecessor, Smith & Wesson Holding Corp., with a severance agreement that requires the company to lease office space from him. American Outdoor has also come under pressure this year from BlackRock Inc., its largest shareholder with a 12.4% stake, and more recently from the Major Cities Chiefs Association, which represents chiefs of police of dozens of cities. Separately, Majority Action, a left-leaning shareholder group that holds American Outdoor shares, blasted the company for “abruptly” shuttering the Smith & Wesson Academy without sufficiently sharing its plan and for weak enforcement of company policy regarding conflicts. It also recently accused company managers of breaching an investor resolution regarding political contributions.
Macquarie Korea Wins Battle With Platform Over Infrastructure Fund
" The Investor (Korea) (09/20/18) Ga-young, Park"
A Korean asset management firm has failed to unseat Macquarie Korea Asset Management as fund manager of the Macquarie Korea Infrastructure Fund, the only listed infrastructure fund in Korea. Platform Partners Asset Management's failed bid is considered the first attempt of shareholder activism by a local company engaging an overseas firm. Platform called for a shareholder meeting to replace Macquarie Korea after the Korea unit of the Australian financial group refused to lower its management fees. Of the shareholders who held a 74% stake that participated in the voting, only 31.1% of the total shares, or 42% of the participants, voted for dismissal of Macquarie Korea, failing to meet the 50% threshold. Major institutional investors and the three largest shareholders were a factor in the results. Three financial units of Hanwha Group, which hold 6.13%, and Shinyoung Asset Management, controlling 5.77%, reportedly voted against the Platform initiative. Glass Lewis supported a change in fund manager, while Institutional Shareholder Services opposed the idea.
Carige's Top Investor Secures Majority of New Board
" Reuters (09/20/18) Za, Valentina; Mandala, Andrea"
Carige's top investor Vittorio Malacalza won control of the board on Thursday, defeating a group of rival investors who wanted to keep the current CEO to steer Carige toward a merger. The newly elected board will meet shortly to appoint UBS banker Fabio Innocenzi as Carige's new CEO. Malacalza, who owns a 27.6% stake in the embattled Italian bank, on Thursday installed seven of 11 directors, and his victory could limit the prospect of a merger which regulators have asked Carige to consider. “We shouldn't start by talking about a merger. A good board assesses the situation and then discusses it with the regulator,” Malacalza said after the vote. The European Central Bank (ECB), which is upset with the frequent management changes, has given Carige until the end of the year to fill a gap in its second-tier capital, unless it seeks a merger with a stronger peer. “The ECB's deadlines are reasonable. We are not here to improvise, we know exactly what we need to do,” said Pietro Modiano, an Italian banker picked by Malacalza as Carige's new chairman. “No more mistakes in Genoa: this is my commitment.” Modiano said the top shareholder would stand by the bank if it needed more capital. A quick merger was the goal of London-based Italian financier Raffaele Mincione, who had struck a deal with two other shareholders over 15.2% of Carige's capital. But with voting rights capped at 9.99%, the three could only appoint three board members on Thursday, including Mincione himself.
Ryanair Chair Survives Shareholder Revolt but Investors Want Change
" The Guardian (09/20/18) Monaghan, Angela"
Ryanair Chairman David Bonderman has survived a shareholder revolt, but investors have called for change at the airline after a summer of strikes and flight cancellations, and amid accusations of a lackluster board unwilling to stand up to management. Approximately 30% of shareholders voted against the re-election of the long-serving Bonderman at its annual meeting. Meanwhile, CEO Michael O'Leary was supported by 98.5% of investors. However, Aberdeen Standard Investments, which on behalf of its clients manages a stake equivalent to 0.9% of the company, said it would be the last time it supported Bonderman and the senior independent director, Kyran McLaughlin. "Given the challenges the company faces, for example in union and labor relations, it is clear that governance needs to evolve. Strong, independent, and visible board leadership is more important than ever," says Alison Kennedy, an investment director at Aberdeen. She says she needs to see "clear progress on succession for these two key board positions by the time of the AGM next year," otherwise "we will vote against the re-election of Mr. Bonderman, Mr. McLaughlin, and the other members of the nominations committee."
Nestlé Sharpens Focus on Food and Beverages With Review of Skin-Health Unit
" Wall Street Journal (09/20/18) Chaudhuri, Saabira; Blackstone, Brian"
Nestlé SA (NSRGY) is weighing strategic options for its skin-health business, in an effort to narrow its focus to food and beverages amid pressure from Daniel Loeb. The Swiss consumer goods giant on Thursday did not specify the unit was up for sale but such reviews often result in a disposal. The skin-health division could fetch about $4.1 billion, according to Jefferies analyst Martin Deboo. The move comes after Loeb acquired a $3.5 billion stake in the company last year and called for changes, including that it sell its stake in L'Oréal SA and the skin-health branch. The review is likely to close the door on a business that Nestlé just four years ago called one of its most promising, but as sales growth slowed, investors questioned how the unit fit into Nestlé's broader business. On Thursday, Nestlé said it had decided the unit's growth opportunities “lie increasingly outside the group's strategic scope.” It expects the review to be completed by mid-2019. Loeb has been critical of Nestlé, noting just half its sales comes from the businesses Schneider has said are key for growth: coffee, petcare, water, and infant nutrition. He said Nestlé could get rid of frozen food, ice cream, packaged meats, pasta, and peanut milk in addition to other assets. “We expect Nestlé to further divest nonstrategic, underperforming assets,” said analysts at Vontobel following Thursday's announcement.
Fox, Comcast $35 Billion Takeover Battle for Sky Heads for One-Day Auction
" CNBC News (09/20/18) Browne, Ryan"
Comcast Corp. (CMCSA) and 21st Century Fox Inc. (FOXA) will settle their takeover battle for British broadcaster Sky PLC via an auction beginning Friday and ending the following day. According to the United Kingdom's Takeover Panel, there will be a maximum of three rounds to decide the fate of the deal, and each bid must be made in cash. In the first round, the company with the lowest bid—in this case Fox—can boost its bid for Sky. Comcast then has the opportunity to increase its bid in the second round. If the auction has not been concluded during that round, it is then carried into the third and last round. Sky, Fox, Comcast, and Disney (DIS) agreed to an auction to settle the bidding war. Such auctions are very unusual when it comes to deal-making for such a high-profile public company. Sky is presently valued at £27 billion, which translates to over $35 billion.
Shareholders Push Nike for Greater Disclosure on Political Spending
" Wall Street Journal (09/20/18) Lemos Stein, Mara"
Nike (NKE) investors are calling for greater transparency related to its political spending and will vote on a proposal at its annual general meeting Thursday demanding regular reporting on political contributions. Nike’s board is recommending shareholders vote against the resolution for greater political-spending transparency, adding that the company's existing policies and disclosures have proper oversight, according to its proxy statement. Enhanced transparency would put Nike at a “competitive disadvantage,” according to the statement, because it would reveal “strategies and priorities designed to protect the economic future” of the company. However, “Nike has the most convoluted and opaque policies of all the companies we've examined and negotiated with over more than a decade now,” said Bruce Herbert, founder of Newground Social Investment, a responsible investing fund, and Investor Voice, an investor advocacy group. Investor Voice is the main proponent of the resolution. Investors concerned with social issues have recently upped the pressure on companies, seeking greater political spending disclosure. Nike has resisted repeated demands for greater disclosure, some investors said. The company has received proposals for improved political spending disclosures five times since 2012, and last year it received 30% support from shareholders.
Qualcomm Prepares to Add New Board Directors - Sources
" Reuters (09/18/18) Nellis, Stephen; Roumeliotis, Greg"
Qualcomm Inc. (QCOM) is preparing to appoint at least two new directors to its board, according to sources, as it seeks to placate shareholders who withheld voting support for its board last March. Irene Rosenfeld, former CEO of U.S. snack foods company Mondelez International Inc. (MDLZ), and Martin Anstice, CEO of semiconductor equipment manufacturer Lam Research Corp. (LRCX), are in advanced talks to join Qualcomm's board, the sources said Tuesday. Their additions would expand the board from 12 to 14 members. Additional director appointments next year are possible, the sources added. Qualcomm is under pressure to deliver on its financial goals after upsetting shareholders by spurning a $120 billion takeover bid from rival Broadcom Inc. (AVGO), failing to secure Chinese regulatory approval for its $44 billion acquisition of NXP Semiconductors NV (NXPI), and neglecting to resolve a longstanding patent dispute with Apple Inc. (AAPL). Investors expressed frustration with the company last March when most of Qualcomm's board directors, including CEO Steve Mollenkopf, were elected with voting support of less than 50% of the shares outstanding despite running unopposed. That followed the exit of Chairman Paul Jacobs, who resigned to explore an acquisition offer for the company which has yet to materialize.
Starboard, Other Firms Invest Big in Casino Stocks
" New York Post (09/18/18) Kosman, Josh"
Starboard Value has quietly built a $500 million-plus stake in MGM Resorts (MGM) and reportedly is pushing for major changes at the Las Vegas casino chain. The investment is the latest by several major hedge funds in embattled casino chains, hoping Las Vegas is poised for a recovery, sources said. Starboard joins Canyon Capital, Eminence Capital, and HG Vora on MGM's shareholder register. HG Vora has also acquired a stake in Caesars Entertainment (CZR), according to a Tuesday regulatory filing, and reportedly will be pushing for changes. Starboard and other funds' ideas for MGM include pressuring the chain to sell its Macau property and combining its MGM Growth Properties real estate investment arm with Caesars' real estate investment trust, Vici Properties, sources said. Overall, however, it is a bet on Vegas. Shares of casinos there fell in August with the report of weaker-than-expected July results, but one MGM investor called it a "temporary hiccup," adding, "I'm still a big believer in the Las Vegas market." That includes the expectation that the NFL's Oakland Raiders moving next year to Las Vegas will bring more visitors. Also, the federal government repealing the ban on legalized sports betting should bring extra income to MGM and Caesars, the investor said. There could be proxy fights soon at the two chains, with the entire MGM board going up for election. There is a December deadline to nominate new directors, the investor noted.
Thyssenkrupp Overhaul Must Protect Worker Interests - Labor Boss
" Reuters (09/18/18) Käckenhoff, Tom"
Thyssenkrupp employees are open to a restructuring of the company as long as their interests are protected, according to Dirk Sievers, newly elected works council chief. The company's second-largest shareholder, Cevian, has long argued that an overhaul would give its individual businesses greater freedom, making it easier for the group to explore structural options. Meanwhile, Elliott disclosed in May it had taken a stake of less than 3% in Thyssenkrupp, stoking fears of a break-up among its nearly 160,000 workers. "If an investor accepts that workers and society do have justified interests then I don't have a problem with that," said Sievers. He said there must be "a long-term perspective for workers and the business." Thyssenkrupp also is searching for a new chief executive and chairman after the group's two top bosses quit in July following pressure from shareholders.
Trian Fund Management Shakes Up Two Big Investments
" Institutional Investor (09/17/18) Taub, Stephen"
Trian Fund Management sold 4.9 million shares of food service giant Sysco (SYY) last week, according to a recent filing. The hedge fund firm said the sales were done "for portfolio management purposes" and in connection with the expiration of a lock-up period. The stock, which Trian began buying in the second quarter of 2015 to take a 7.1% stake in the company, has roughly doubled since the middle of that year and remained the firm's second-biggest U.S. long position as of the end of the quarter. In a separate filing, Trian said that partner Matthew Peltz resigned from the board of directors of water treatment company Pentair (PNR) on Sept. 10. Peltz stepped down from the board "to devote more time to current and future board positions and his commitments to Trian Management," according to the firm. Earlier this year, Pentair completed its plan to spin off its electrical business, now called nVent Electric (NVT). While Trian owned 17.56 million shares of nVent at the end of the second quarter, it sold 1.7 million of its 14 million shares of Pentair on Aug. 13, leaving it with a 7% stake. Trian has now moved into the black after posting losses earlier in the year.
Paul Singer Balks at $160 Per Share Athenahealth Bid
" New York Post (09/17/18) Kosman, Josh; English, Carleton"
Elliott Management has backed away from its $160-a-share bid for Athenahealth (ATHN) and could be considering a bid at a lower price, according to sources. Meanwhile, other suitors have also gone quiet, sources said. Following the hedge fund's retreat and the lack of serious interest from others, Athena has extended a final bid deadline by 10 days to Sept. 27, the sources added. Elliott, which succeeded at getting Athena to oust founder and CEO Jonathan Bush and to put the company up for sale, said in May it was prepared to pay $6.9 billion for Athena—contingent on due diligence. “There has been a lot of speculation on Elliott's motives” for saying in May it was prepared to pay $160, an industry source said. “It feels now like they never really wanted to own it,” and were just setting a floor for the auction, the source said. Meanwhile, Elliott might have learned upon doing diligence that there were unexpected problems at the company, sources said. Speculation in healthcare circles is that Athena will see sub-$150-a-share bids, sources said. The remaining suitors, including Elliott, which is teaming with Bain Capital on its bid, are likely trying to see what Athena will take in a face-saving sale, sources said. The news could be positive for David Einhorn's Greenlight Capital, which has been shorting Athena shares. “Our take is that the activist has little interest in actually buying the company, but hopes someone else does,” Einhorn said in a July letter to his investors.
DOJ Clears Cigna's Acquisition of Express Scripts
" CNBC (09/18/18) Chappell, Carmin; Coombs, Bertha"
Cigna (CI) and Express Scripts (ESRX) announced Monday the U.S. Department of Justice (DOJ) has cleared their $52 billion deal. In combining Cigna, a health insurer, and Express Scripts, a pharmacy benefit manager, the firms say they can improve care for patients and lower healthcare costs. Shareholders voted to approve the merger last month, despite opposition from Carl Icahn, who wrote an open letter urging shareholders to reject the deal. The companies say they are still working on final approvals from state regulators, but they expect to close the deal by the end of 2018. The DOJ's antitrust division found that after the Cigna- Express Scripts merger, there will still be at least two large pharmacy benefit management firms and several smaller PBMs in the market. The DOJ also said it would be hard for Cigna to increase PBM costs for other insurers because of competition from other integrated insurer-PBM players. The decision bodes well for competitors CVS Health (CVS) and Aetna (AET) in terms of their bid to become an integrated PBM and health insurer.
Vodafone’s Incoming Chief Executive Weighs Masts Sale
" Financial Times (09/16/18) Fildes, Nic"
Vodafone's incoming CEO has unveiled plans to overhaul the business, which could potentially include a sale of tens of thousands of mobile masts to reduce the company's €31 billion debt pile. The announcement by Nick Read, CEO designate until he takes over from Vittorio Colao next month, followed a recent trading update that provided investors with an uninspiring outlook for the rest of this financial year because of competition in its Italian and Spanish markets. Meanwhile, Vodafone’s waning share price has opened the door to Elliott Advisors, which has purchased shares in the company and, according to one source, could pressure Vodafone to sell off its mobile masts. The telecoms company has 110,000 towers across Europe but has been hesitant about a deal under Colao. Barclays has estimated that Vodafone's European towers could be worth €12 billion. “Towers are also a consideration,” Read said, adding that Vodafone would be “pursuing” the strategy although there was “nothing today” to announce. The company will present more of its plans in November when it reports results as Read tries to improve confidence in the company's strategy.
United Technologies Says Rockwell Deal, Breakup Decision on Track
" Wall Street Journal (09/14/18) Gryta, Thomas"
The need to sell a business unit has delayed United Technologies' (UTX) $23 billion acquisition of Rockwell Collins (COL), according to CEO Greg Hayes. He expects the deal, which was announced a year ago, to close by the end of the month, and in the meantime, the industrial conglomerate is moving ahead with plans for a possible breakup. Bill Ackman's Pershing Square Capital Management and Daniel Loeb's Third Point have been pushing the company to pursue a split. United Technologies is looking at various options for splitting up. The company has previously talked about a possible three-way split, with its aerospace business, including Rockwell Collins, combining with jet engine maker Pratt & Whitney. The Otis elevator business would be separate, along with its Climate, Controls & Security division, which owns Carrier air conditioners. The company likely will make its decision within 60 days, Hayes said, but hinted that investors prefer the company to separate.
Campbell, Third Point Urge Shareholders to Vote for Two Different Boards
" Reuters (09/14/18) Naidu, Richa; Herbst-Bayliss, Svea; Joseph, Saumya Sibi"
Daniel Loeb's Third Point LLC and Campbell Soup Co. (CPB) have filed preliminary proxy materials exhorting shareholders to vote in favor of their respective slates of board nominees. Third Point, which owns a 5.65% stake in the company, launched a proxy contest last week to overhaul Campbell’s 12-member board. It said that the soup-maker was in a “mess” and blamed its board for failing to take corrective action. The move came a week after Campbell unveiled the results of a strategic review and said it would sell its international and fresh refrigerated-foods units. Third Point's 12-person slate includes William Toler, former CEO of Hostess Brands (TWNK); Munib Islam, a partner at Third Point; and George Strawbridge, a grandchild of chemist John Dorrance who invented condensed soup and formerly ran Campbell. The company, which wants to keep its existing board in place, said it did not support any of Third Point's nominees. Two other Dorrance grandchildren and a great grandchild currently serve on the board and own a major stake. Third Point said the Campbell board's failure to have a functioning succession plan in place following CEO Denise Morrison's departure in May was "a reflection of its inability to conduct one of the most essential duties of any board of directors."
Myer Board Spill Looking Less Likely After Vote of Support From Geoff Wilson
" Australian Financial Review (09/16/18) Mitchell, Sue"
An effort by Solomon Lew's Premier Investments to shake up the board at Myer appears less likely to succeed after another major shareholder came out in support of management. "[Chairman Garry] Hounsell must step down immediately or risk having his board spilled by a strong shareholder revolt at the upcoming AGM," Lew said last Wednesday after the company reported a $486 million bottom line loss and its seventh consecutive quarter of declining same-store sales. Lew, who had been criticizing Myer since Premier bought a 10.8% stake last year, finally saw his chance to appoint three of his own directors to the Myer board and was confident fellow shareholders would reject the remuneration report at the upcoming annual meeting, triggering a board overhaul. However, Lew was unaware that veteran fund manager Geoff Wilson had been quietly gathering a stake in Myer since early July following the arrival of new CEO John King. On Friday, after seeing Myer's full-year results, Wilson's Wilson Asset Management Group (WAM) upped its stake from 4.9% to 5.5%. Wilson not only publicly declared his support for King and his new team, but also suggested WAM was prepared to play an active role in countering Premier's campaign. "The new CEO John King is a proven retailer with a strong track record, we believe his strategy will deliver," Wilson said, adding that there were some encouraging signs in Myer's full-year results and that concerns about the company's viability were fading. Wilson also said that Lew's campaign against Myer was a waste of shareholders' money and time.
TSX-Listed Firms See More Women on Boards, but Top Tier Still Stagnant: Report
" Toronto Globe and Mail (09/16/18) Posadzki, Alexandra"
The number of women holding seats in the boardrooms of Canada's big, publicly listed companies is ticking higher, but gender diversity is stagnating at the executive level, according to a new Osler Hoskin & Harcourt LLP report. As of July 31, women occupied 16.4% of the board seats at Toronto Stock Exchange-listed companies—up nearly two percentage points year over year. However, since 2015, the number of female executive officers remains virtually unchanged. That's the year Canadian securities regulators introduced a "comply or explain" policy, requiring companies to annually disclose the number of women in executive positions and on their boards. "Women occupied, on average, 15.8% of the executive officer positions at TSX-listed companies, up marginally from 15% where it has sat for the past three years," notes the Osler report. Attorney Andrew MacDougall, who specializes in corporate governance, reasons that it's harder to effect change in the C-suite than in the boardroom.
Boardroom Bloodbath Averted, Can Malin Finally Deliver on Its Promise?
" Irish Times (Ireland) (09/14/18) Brennan, Joe"
At Malin Corp.'s annual general meeting on Sept. 12, Chairman Ian Curley averted a boardroom coup. Amid the life sciences investment firm's falling share price, major shareholders including Woodford Investment Management, which has a 23% stake, and the Ireland Strategic Investment Fund voted to reject Malin's executive pay and severance plans. About 27% of shareholders also voted against re-electing CEO Adrian Howd. The company's major shareholders presided over a boardroom shake-up in July that installed Curley as chairman, but sources say Woodford and others plotted to replace Curley with Malin co-founder John Given. However, there are signs that Curley can help the company turn around, with observers citing his expertise in capital markets and capital allocation. Recently, Malin said it decided to focus on four investments with the most potential, meaning 14 others could be disposed.
Teleios Says Research Gap Opens Door to Mid-Cap Deals
" Financial Times (09/12/18) Fortado, Lindsay"
Activists see new investment opportunities in mid-cap companies in European markets, according to European hedge fund Teleios Capital. The new Mifid II regulations, which limit what research costs investment funds can pass on to clients, have caused a decline in the liquidity of mid-cap companies. With less analyst coverage to guide investors and management, activists are circling in an effort to find companies that are undervalued or in need of a shake-up in strategy, says Adam Epstein, co-founder of Teleios. Based in Switzerland, the fund has focused on companies that are "really under the radar screen of most investors," says co-founder Firas Abi-Nassif, adding that the strategy "gives us an edge." The fund has returned about 17.6% annualized since its inception in 2014, and says four of the companies that fit its criteria—SodaStream (SODA), Fenner, Hogg Robinson, and Cambian Group—received takeover bids this year. Teleios, which recently closed to outside investors after reaching more than $1 billion in assets, returned 6.4% this year to the end of August. HFR's activist index is up 2.1% through the end of July.
Japan's Corporate Governance Reform Stalls
" The Asset Online (09/12/18)"
About a third of Japanese companies are not compliant with the nation's recently revised Corporate Governance Code, according to a new report by equity analysts at Jefferies. Overall, governance has improved by 2-3% in 2018, with outside influence leading the way (up 3%), followed by shareholder alignment (up 2%), skills (up 1%), diversity (up 1%), and entrenchment (0%). Companies that were already rated good or average on governance continued to get better, while those that were among the bottom companies made no big improvements. This trend indicates that there is limited pressure on the worst companies to improve, according to Jefferies. A minimum acceptable score is +100 points. However, if the current pace of change continues , it would take 10 years for the average company to improve its score from the current +40 to reach that level. Jefferies says the pace of change is too slow, but is hopeful "because activism by shareholders is on the rise. If much greater pressure is not exerted on companies to reform, we believe that the governance reform movement could lose not only its momentum, but also its credibility," says Jefferies.
Hedge Fund Secretly Built Stake to Push Caesars Sale
" New York Post (09/12/18) Kosman, Josh"
HG Vora Capital reportedly has acquired a 4.9% stake in Caesars Entertainment (CZR) and plans to push the company to sell itself or to let go of major assets, sources said. The move comes amidst growing shareholder frustration with CEO Mark Frissora. Private equity firms Apollo Global Management and TPG Capital named Frissora as CEO in 2015, months before another group of hedge funds forced the chain into bankruptcy and took control. However, many of those hedge funds were surprised by Frissora's appointment given his lack of gaming experience, a source said. Frissora was previously ousted as CEO of Hertz Holdings in 2014, following pressure from Carl Icahn, after the company reported accounting errors. There is speculation that a lack of support for Frissora from some institutional investors is keeping them from buying its shares. That, in turn, is keeping down the stock price, a source said.