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.
San Francisco Chronicle – A major investor called on Yahoo Inc. to sell its search business to Microsoft Corp. on Wednesday, adding to the pressure on the Sunnyvale Web portal to restart talks with its rival.
Meanwhile, Yahoo agreed to water down an employee severance plan that had been criticized as extravagant, raising speculation that the company was shopping itself for a sale. The changes were made to settle a lawsuit in which shareholders accused Yahoo of devising the severance plan to foil Microsoft’s takeover bid earlier this year.
Ivory Investment Management, a hedge fund that owns a 1.5 percent stake in Yahoo, sent a letter to board members that said a sale would garner $15 billion and help restore the company’s tumbling finances.
Reuters – Endologix Inc said it received an unsolicited takeover bid from hedge fund Elliott Associates LP for $2.25 a share, 18 percent higher than the stock’s Wednesday closing price.
The company, which develops and manufactures minimally invasive treatments for vascular diseases, said it will review the unsolicited proposal and make a determination and respond in due course.
Endologix asked its stockholders to defer judgment on the unsolicited proposal until that determination has been made.
Also on Wednesday, New York-based Elliott took its $529 million cash offer for Epicor Software Corp directly to shareholders, two days after it was snubbed by the business software maker’s board. [nBNG397251]
AP – Chinese steelmaker Sinosteel Corp. has taken control of 98 percent of Midwest Corp. and will proceed with compulsory acquisition of the Australian miner, Midwest said.
In a brief statement Wednesday, Midwest said Sinosteel would recommend de-listing the company from the Australian Securities Exchange. The conclusion of the deal marks the first successful hostile takeover of an Australian firm by a Chinese entity.
The exchange released a notice from Sinosteel to Midwest that said the Chinese company had gained a 98.52 interest on Monday, after U.S. hedge fund Harbinger Capital agreed to the Chinese firm’s offer for its 15.2 percent stake.
Also Monday, major shareholders Murchison Metals Ltd. and Armadale Offshore Inc. accepted Sinosteel’s takeover bid, giving up their 9 percent and 12 percent stakes in Midwest.
Sinosteel launched a $1.36 billion bid for Midwest in December last year, and gained a controlling stake in July.
Wall Street Journal – Hedge fund Elliott Associates LP made public a letter to Republic Services Inc. in which it said the company’s board wasn’t doing its duty by fully considering the raised $6.73 billion takeover bid from Waste Management Inc.
The fund, which said it is a "meaningful" shareholder in the company, asserted the Waste Management bid was more favorable to shareholders than Republic’s proposed acquisition of Allied Waste Industries Inc., initially valued at $6.24 billion in stock.
The size of Elliott’s stake couldn’t be determined, and an official wasn’t available for comment.
The hedge fund urged Republic’s board, in a letter dated Aug. 28 and released Friday, to "vigorously negotiate the best possible deal from Waste Management," maintaining the Waste Management proposal of $37 a share "can reasonably be expected to lead to an offer that is superior to Republic’s no-premium merger with Allied."
New York (HedgeCo.Net) – Philip Richards, head of hedge fund RAB Capital, is stepping down and will be replaced with Finance Director Stephen Couttie, according to a statement made by the company yesterday.
Richards ran the $1.4 billion Special Situations Fund, which received poor press and even worse returns when it lost millions thanks to the nationalization of Northern Rock in February.
Richards will still be employed by RAB, serving as an executive director while still managing the Global Mining and Resources funds, which holds assets of around $210 million. He made headlines recently with his controversial personal stake in Bahamas-based oil exploration company BPC, in which his Special Situations Fund along with Falkland Gold & Minerals facilitated a takeover bid that earned him a hefty paycheck.
RAB currently manages around $5.9 billion in assets, a sharp drop from the over $7 billion it managed in 2007.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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West Palm Beach (HedgeCo.net) – Elliott Associates, a New York hedge fund firm, has bought a 9.9% stake in Epicor Software Corp. and is inquiring about possible strategic alternatives for the company, Markets Media Online reports.
In a filing made with the Securities and Exchange Commission, Elliott now owns nearly 6 million shares of Epicor, just shy of 10% of the company. The firm has been steadily buying up shares since June but made particularly large acquisitions during the last month. It has also acquired more than $18 million worth of convertible bonds for Epicor over the past week.
Breeden Capital Management, another hedge fund firm, also disclosed a 5.25% stake in medical equipment maker Hill-Rom. Former Securities and Exchange Commission Chairman Richard Breeden founded Breeden Capital, which uses an activist strategy to profit from companies that improve corporate governance. The firm’s top holdings include H&R Block, medical equipment sterilization company Steris and diamond retailer Zales.
Elliott also said it has made inquiries as to whether Epicor has considered exploring strategic alternatives. Such language is often a harbinger for an investor pushing for the sale of a company. Elliott earlier this year put pressure on MSC Software to put itself up for sale.
Elliott Associates is known for its activism. In the recent past, it has launched a hostile takeover bid for IT company Packateer, pressed retailer Pier 1 to cut costs and helped Metrologic Instruments founder C. Harry Knowles take his company private. Metrologic has since been taken over by manufacturing giant Honeywell.
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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.
New York (HedgeCo.Net) – Anheuser-Busch has agreed to a $50 billion takeover bid by Brazilian-Belgium brewer InBev, in which will result in the largest beer company in the world.
The final $70 a share offer was $5 higher than the original bid in which Anheuser-Busch rejected. The company will now be called Anheuser-Busch InBev according to an unnamed source and will post annual sales of around $36 billion.
"This combination will create a stronger, more competitive global company with an unrivaled worldwide brand portfolio and distribution network, with great potential for growth all over the world," said the 48 year old Carlos Brito of InBev, who will serve as the head of the new company.
InBev, who produces Labatt Blue and Stella Artois, has been stuck in a nasty month-long battle with Anheuser-Busch after they proposed their own slate of board nominees and both companies filed suits against the other. Anheuser-Busch claimed that their original offer was not only illegal but wasn’t even probable thanks to insufficient funding. They also were clear to point out InBev’s Cuban brewery.
Brito will make St. Louis the North American headquarters and promised not to close any of Anheuser’s U.S. breweries.
Shares of both companies surged on Friday amidst negotiation rumors. Anheuser shares rose 8.6 percent while InBev shares climbed more than 7 percent.
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) – 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
Reuters- Hedge fund SAC Capital reported on Wednesday that it had cut its stake in Take-Two Interactive Software Inc to 4.4 percent from 5.3 percent.
The fund did not give a reason for the recent stock sales in a filing with the U.S. Securities and Exchange Commission. It said it was no longer a beneficial owner of 5 percent of the company’s stock and did not intend to file further updates on its stake with the SEC.
Take-Two is facing a takeover bid by larger rival Electronic Arts Inc, which it has rejected as being too low.
The Age- Plans by Melbourne-based Lion Selection to sell its stake in Indophil to Xstrata for $1 a share have come under attack from London hedge fund Carrousel Capital.
The move raises the prospect that Indophil can turn the tables on Lion, its 25.4% shareholder, with its scrip takeover bid for the group.
Carrousel holds more than 3% of Lion and said Xstrata’s bid for Indophil was sufficiently low-ball for it to vote against resolutions at Lion’s June 23 extraordinary meeting to seek shareholder approval to accept the Xstrata offer.
