Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Chicago Tribune – The leader of an activist hedge fund with a significant stake in Sara Lee Corp. has been added to the foodmaker’s board of directors.
Downers Grove-based Sara Lee said Thursday that it is expanding its 10-member board by one, naming Jeffrey Ubben, founder and chief executive of ValueAct Capital, to the new spot. Last winter, San Francisco-based ValueAct bought a 5 percent stake in Sara Lee, maker of bread, hot dogs and meat products sold under such brands as Hillshire Farms and Jimmy Dean.
Activist investors often buy into what they perceive as undervalued companies and then urge significant changes. But ValueAct is considered less strident than some other activist funds, saying at the time of its purchase that it had no plans to push for strategic change at Sara Lee and was comfortable with the firm’s direction.
Neither Sara Lee, which is in the midst of a multiyear turnaround effort, nor ValueAct could be reached.
New York (HedgeCo.Net) – Harbinger Capital Partners is no stranger to aggressively seeking strategic changes within companies in which they invest. This month, it’s Harbinger vs. Cleveland-Cliffs Inc. The mining company is urging shareholders to reject a bid by the activist hedge fund that would give them veto power over one of Cleveland-Cliffs proposed acquisitions.
Harbinger is the company’s largest shareholder with a 15.5 percent stake. The hedge fund is protesting the potential acquisition of Alpha Natural Resources in what would be a $8.1 billion deal. Harbinger believes it is not in the best interest of the shareholders. Meanwhile, the hedge fund is trying to increase its stake in Cleveland-Cliffs to as much as one-third.
Harbinger has made headlines recently for similar antics involving their other investments, including the New York Times and Media General. Harbinger was awarded two seats on the board of the Times, while acquiring three seats on Media General’s board.
In order for the deal to take place, 66 percent of shareholders must approve the bid for Alpha. The vote which will decide Harbinger’s control share acquisition will take place on October 3.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) – Harbinger Capital has taken an 8 percent stake in Cablevision Systems Corp., according to a regulatory filing done yesterday with the Securities and Exchange Commission.
The activist hedge fund now owns nearly 19 million shares of the cable operator. The filing communicated Harbinger’s views that the stock is undervalued and also touched on the possibility of a strategic restructuring, saying they may “seek to influence or change the control” of the company.
It is not uncommon for hedge funds and other private equity firms to try to replace or enhance a company’s board of directors in order to give them more control or decision making privileges. Hedge funds generally seek high returns in a short time frame, and are more than prepared to try and replace management should the current slate fail to share their views.
Harbinger is no stranger to this practice. Already, the hedge fund has sought seats on two of the boards of companies in which they invest: The New York Times and Media General. Harbinger was awarded three seats on Media General’s board and two seats on the board of the Times after a much publicized near proxy battle.
Shares of Cablevision closed at $32.46 on Thursday, down 10 cents.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
CNBC – Cramer got a chance Thursday to check in briefly with CSX Chairman and CEO Michael Ward.
Ward’s been a regular guest on Mad Money as his company has battled with activist hedge funds fighting to have him ousted.
Those hedge funds have managed to get two people on CSX’s board of directors, and another two are pending approval based on a lawsuit that proceeds to oral hearings this coming Monday, Aug. 25 in the Second Court of Appeals in New York.
“Maybe they can actually help,” Cramer said of the board additions.
Tampa Tribune – Yahoo is recounting the shareholder vote for its board of directors after discovering that a tabulating firm failed to register the opposition of a major investor.
The revision won’t change the outcome of Friday’s election, which retained Yahoo’s incumbent directors despite shareholder anger about the board’s handling of a now-withdrawn $47.5 billion takeover bid from Microsoft Corp.
However, the change will add a little more punch to the protest against the Yahoo board. The directors re-elected last week had been supported by at least 78 percent of the votes cast, based on the original results.
"It’s important for Yahoo’s board to understand there is still pressure on them," said Eric Jackson, a hedge fund manager who represents a group of stockholders with about 3.2 million Yahoo shares. "I thought Yahoo’s board was kind of let off the hook last week when they didn’t really deserve to be."
Capital Research Global Investors, which owns a 6.2 percent stake in Yahoo, lodged the inquiry Monday that resulted in the election recount. Convinced that its opposition to Yahoo’s board wasn’t reflected in last week’s vote, Capital Research demanded an audit from Broadridge Financial Solutions, the processing firm responsible for casting its ballot.
Guardian Unlimited- The struggling internet company Yahoo has struck a pact with its billionaire critic Carl Icahn by giving the hedge fund activist a minority presence on its board to avoid a potentially tempestuous showdown at a shareholder meeting next month.
Facing crumbling support among Yahoo investors, Icahn yesterday abandoned his efforts to overthrow the leadership of the embattled Silicon Valley company and force its sale to Microsoft.
Instead, the 72-year-old Icahn & Co hedge fund manager is settling for an offer of three seats on Yahoo’s board. One director will stand down and the board will expand from nine to 11 members. Wall Street analysts greeted it as a qualified victory for Yahoo’s founder, Jerry Yang, who has pressed hard to maintain its independence and who waged an energetic campaign to discredit Icahn.
Bizjournals.com- CSX Corp’s board is in for a bumpy ride despite assurances from the railroad and two rival hedge funds they will work together to maximize profitability, a railroad analyst said.
"Everyone is human and the proxy fight between them has gotten ugly at times," said Lee Klaskow, a Longbow Research senior analyst.
Four out of five of the nominees put forth by The Children’s Investment Fund Management LLP and 3G Capital Partners Ltd. have been voted in by shareholders, according to the independent inspector of the election’s preliminary report. As reported, the vote is a sound defeat for CSX CEO Michael Ward and his managment group, which fought hard to convince shareholders to avoid the candidiates backed by the hedge funds.
Klaskow said the board changes won’t change day-to-day operations, but they may affect long-term ones, as the hedge-fund-nominated members will likely make more aggressive proposals.
New York (HedgeCo.Net) – Budweiser maker Anheuser-Busch is suing InBev after declaring that their “bargain price” offer of $65 a share is illegal. Anheuser-Busch accuses InBev of using “deceptive conduct” to try to win control of the company.
InBev recently filed a consent solicitation statement with regulators in an attempt to take over Anheuser-Busch’s board. In the new suit, Anheuser-Busch is seeking an injunction against them, in hopes of quelling any form of takeover.
They also claim that InBev was spewing false rumors of an acquisition last month and their attempts to take over the board is a "self-serving effort" to try to purchase the company at a lowered price.
"To date, Anheuser-Busch has been unwilling to engage with InBev in a dialogue to achieve a friendly combination. As such, InBev believes it is time to take action to ensure Anheuser-Busch shareholders are provided the opportunity to have a direct voice in the process and a say in the future direction of the company," according to a recent statement by InBev.
Anheuser-Busch also claims in the suit that InBev does not have sufficient financing to facilitate the $46 billion takeover bid stating, "Given the state of the credit markets today, no group of financial institutions would unconditionally commit $40 billion to a borrower to pursue a hostile acquisition."
With St. Louis serving as the battlefield for the case, InBev placed a full-page ad in yesterday’s St. Louis Post-Dispatch. The ad stated that Budweiser would be expanded globally and the takeover would make for a stronger, more competitive global company.
Anheuser-Busch shares closed at $61.76 at a share on Tuesday.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
New York (HedgeCo.Net) – After months of on-again off-again talks between Yahoo and Microsoft, the possibility of a merger looks to be back on.
According to the Wall Street Journal, Microsoft said they may be interested in restarting talks if the internet giant’s board was replaced, a move that billionaire tycoon Carl Icahn has been striving to achieve.
"If Microsoft and Mr. Ballmer really want to purchase Yahoo, we again invite them to make a proposal immediately," Yahoo said in a recent statement.
Icahn had launched a proxy battle to replace Yahoo CEO Jerry Yang and other members of the Yahoo board after they originally rejected Microsoft’s first offer for $47.5 billion. Icahn blamed it on Yang’s personal disdain for Microsoft and said they were not acting in the shareholders best interest. Backed by a few prominent hedge funds who also acquired massive shares in Yahoo, it looked as if Icahn was going to score a victory only to have talks cool shortly thereafter.
While some shareholders are reluctant at how Icahn would manage the company, others are urging him to push for fewer seats on the board. Yahoo’s annual shareholder meeting will be held on August 1st.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Daily Telegraph- The High Court has rejected an audacious last-gasp bid by hedge funds to block Candover’s £1.8bn bid for oil services group Expro.
Hedge funds holding around 25pc of Expro – led by Mason Capital and Sandell Asset Management – asked the court on Monday to block the deal and force Expro’s board to reconsider a riskier – but higher – offer from US giant Halliburton. But yesterday Mr Justice David Richards dismissed the argument by the hedge funds’ lawyers that under Takeover Panel rules Expro should have run an auction between the two rivals.
"I do not accept the criticisms of the board made by the shareholders," said Mr Justice Richards.
Forbes- Shares of railroad operator CSX Corp. may trade actively Thursday after a federal judge’s ruling opened the doors to a proxy battle later this month.
On Wednesday afternoon, the judge ruled that dissident shareholders broke the law in their effort to change CSX’s corporate structure, but did not block them from voting for their nominees to the company’s board.
Jacksonville, Fla.-based CSX had sued the two hedge funds in March, accusing them of using share swap contracts to evade federal securities filing requirements.
CNN Money- Two hedge funds urged shareholders of CSX Corp. on Tuesday to elect their minority slate of five board candidates, arguing that their nominees have more industry experience and a greater financial stake in the railroad operator.
The hedge funds are TCI, which manages The Children’s Investment Master Fund, and 3G Capital.
In October, TCI asked CSX’s board to separate the roles of chairman and chief executive, add new directors with railroad experience and present a plan to improve operations. In December, they jointly nominated the minority board slate.
