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New York (HedgeCo.Net) -The much anticipated annual meeting of railroad operator CSX took an odd turn when results of Board elections were kept from the media and CSX head Michael Ward abruptly ended the meeting.
The elections were a subject of great debate, after months of pressure brought on by hedge funds TCI and 3G Capital Partners, who during a 6-month long proxy battle nominated a dissident slate for the 12-member board.
According to CSX, results weren’t readily available because they were “too close to call.” The hedge funds believed that they won at least two seats and maybe four, said Snehal Amin, founding partner of TCI. The hedge funds declared it was a “victory for all shareholders.”
"Our proxy advisors are trying to figure out with large financial institutions whether they changed their votes," Amin said, referring to the shareholders. "Hopefully not enough changed their minds to affect the outcome."
The proxy battle was sparked by the hedge funds’ desire to elect those with experience in the railroad industry to the board, something they say the current board lacks. Hedge funds like TCI and 3G are known for pushing for strategic change within companies to fuel high returns for shareholders.
Ward, who has resisted the hedge funds advances, repeated his position to the crowd gathered in New Orleans. "CSX has a disciplined management that favors building lasting shareholder value. The board sets aggressive goals and holds management accountable for achieving them."
To which Amin shared his view, “We believe CSX can and should be the best railroad in America. [Our candidates] have real railroad experience, they know the right questions to ask and have the economic incentives to do so."
CSX says the results of the vote will be announced on July 25th at the company’s headquarters in Jacksonville, Florida.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) – The proxy battle waged by two hedge funds against railroad operator CSX is far from over, despite a ruling against the funds last week.
TCI, who runs the Children’s Investment Fund of Britain, and 3G Capital Partners, continue in their quest to elect 5 nominees to the board of CSX, citing lack of railroad experience among the current 12 members. The hedge funds have a combined 8.7% share in CSX.
A Manhattan court recently ruled that the two hedge funds had violated disclosure regulations, though there was nothing the judge could do to stop the funds from voting their shares at the company’s annual meeting on June 25, much to the dismay of CSX.
The ruling also stated that, “any penalties for defendants’ violations must come by way of the Securities and Exchange Commission or the Department of Justice.” CSX may appeal the decision.
The hedge funds wish to gain seats on the board in order to gain a strategic vantage point from inside the company. Funds may do this in an attempt to gain higher returns for shareholders.
“Michael Ward, the Chairman and CEO of CSX, wondered why we haven’t just taken our profits and sold our shares, much as the board and management of CSX have done over the past two years. If we believed that CSX already had achieved its full operating potential, that’s exactly what we would do. However, in our view, CSX has only just begun to improve…” said the hedge funds in a recent letter to shareholders, prompting them to send in their proxy cards.
Alexandre Behring from 3G and Chris Hohn from TCI are two of nominees looking to gain seats. The other three hopefuls are not affiliated with the funds, but have experience in the railroad industry, something that the fund’s believe is crucial to the value of the company.
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
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.
Houston Business Journal – A noisy, contentious proxy battle ended quietly Wednesday when shareholders of Vaalco Energy Inc. voted in the company’s chosen slate of board directors.
Houston-based Vaalco (NYSE:EGY) had spent the past three months fending off an attack from a New York hedge fund that was formed in January and built up a substantial position of shares — 4.7 million — on the open market before disclosing its position in March.
Nanes Delorme Partners I LP had proposed its own slate of three directors for election at the meeting and demanded big changes at the exporation and production company, which has most of its holdings in West Africa.
Vaalco had filed a lawsuit against the hedge fund as part of its response to the coup attempt but has dropped the proceedings as part of an agreement cobbled together late in the evening of May 23 to end the dispute. Nanes Delormes in turn agreed to vote in favor of Vaalco’s director nominees.
Proxy advisory firm Glass Lewis & Co. weighed in a day earlier, recommending that shareholders withhold support for Vaalco board nominees W. Russell Scheirman, president and chief financial officer, and Arne Nielsen. The proxy firm said it agreed with many of the corporate governance and stock performance issues raised by Nanes Delormes.
Reuters- U.S. railroad CSX Corp, locked in a proxy battle with two hedge funds, urged shareholders in a letter on Tuesday to vote against the activist investor group’s proposed slate of five directors, saying they had "no plan" for the company.
"The TCI Group, which is promoting a slate of five new directors for the CSX board, has no plan and no new ideas for the company," wrote Michael Ward, chairman and chief executive of Jacksonville, Florida-based CSX. "They’ve made demands that we believe would damage CSX and impair the value of your investment — ideas such as saddling CSX with ‘junk’-rated debt or doing a leveraged buyout at $50 a share, with the stock price now in the high $60s."
New York (HedgeCo.Net) – Carl Icahn continues his quest to shake up the board of Yahoo, and this time, that includes ousting CEO Jerry Yang. According to the Wall Street Journal, Icahn is channeling shareholder complaints in hopes to fuel his proxy battle and to facilitate the Microsoft deal.
Last month, several Yahoo shareholders filed a complaint against Yang and the board of Yahoo, claiming that they acted in a way to discourage the Microsoft deal and that Yang, who has a personal disdain for the software giant, did everything he could to quell the prospect of a merger. According to the statements, Yahoo had rejected a bid from Microsoft back in January 2007, when CEO Terry Semel said no to a $40/share offer.
The plaintiffs also suggest that Yang, along with co-founder David Filo and other Yahoo executives, not only turned down Microsoft’s bids, but set up a nice exit plan for employees to leave the company should there be a hostile takeover by constructing attractive compensation plans.
"Nobody ever understood the magnitude of what Yahoo did to do avoid making a deal," said Icahn.
Yahoo, who issued a statement last night, said that Yang, along with the board, has been "crystal clear that it would consider any proposal by Microsoft that was in the best interests of its shareholders".
Recently, hedge funds Paulson & Co. and Third Point LLC publically backed Icahn’s push for the Yahoo/Microsoft deal, with the hopes that the deal would help fuel higher returns and help Yahoo better compete against Google. Both hedge funds hold a major stake in Yahoo.
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) – Soft-drink maker Cott Corp. has gotten a vote of confidence from hedge fund Crescendo Partners, along with a boost in share value.
Crescendo has raised its stake to 8.7% in the struggling company, and will meet with company executives to discuss performance and “potential changes in the composition of the management team and the board of directors.”
After years of lagging stock prices, shares of Cott rose almost 14% to $3.61 yesterday with the news.
Crescendo, along with other hedge funds and private equity groups, often seek seats on the board and positions in management in order to bring about strategic change and to garner higher returns.
Crescendo was recently involved in a bitter proxy battle with Charming Shoppes Inc. after wanting to place members of their team on the board of the plus size women’s clothing manufacturer. The two companies eventually reached a settlement, with Crescendo receiving two spots on the board.
In a recent filing with the SEC, Crescendo stated that they have “engaged in and intends to continue to engage in discussions with management and the board of directors of the issuer concerning the business, operations and future plans."
Cott, who’s best known for their RC Cola product, has recently lost some shelf space at Wal-Mart, their biggest client. Mario Pilozzi, the former CEO of Wal-Mart Canada Corp., has agreed to work as an executive should Crescendo attain their board seats. Cott is currently run by CEO David Gibbons.
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) – Another hedge fund is backing Carl Icahn’s proxy battle against Yahoo, days after Paulson & Co. gave their support.
Third Point LLC, a hedge fund that manages $5.7 billion in assets, is believed to be on board after accumulating 5 million shares of Yahoo Inc., along with T. Boone Pickens, an oil investor who has amassed 10 million shares.
An undisclosed source told reporters that Third Point head Dan Loeb “strongly supports Icahn and supports his slate and thinks that he is shining a bright light on the botched process at the Yahoo board in negotiating the deal with Microsoft.”
Icahn believes that Yahoo should be sold to Microsoft, in order to better compete with Google. Yahoo rejected Microsoft’s initial offer of $47.5 billion before the software giant broke off talks earlier this month.
Initiating his fight last Thursday, Icahn believes, “it is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis." Talks between Microsoft and Yahoo are said to have been revived.
Paulson & Co., the $30 billion hedge fund manned by famed John Paulson, currently holds 50 million shares in Yahoo. Paulson has expressed his desire for the merger, aligning himself with Icahn last week.
Hedge funds, who push for high returns in the short run, many times take a proactive approach in restructuring a company in which they are invested. Icahn is also aiming to strategically place himself, along with Mark Cuban, Frank Biondi and Robert Shaye on the board.
Even with only a few companies backing the proxy battle, the force behind them is monumental. The supporters will have accumulated over 80 million shares of Yahoo, which equates to over 5% of the total shares.
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
