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.
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]
Reuters – Hedge Fund Elliott Associates LP on Wednesday 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.
Elliott said it, through a unit, is offering $9.50 per share through the tender offer, about 40 percent premium to the stock’s closing price Tuesday, and a 20 percent premium at the time of its October 1 offer to the company.
"We would not be surprised to see shareholders accept Elliott’s offer," analyst Peter Goldmacher of Cowen & Co said by phone, adding that he does not expect a rival bid to surface.
Epicor shares shot up as much as 14 percent in morning trade but pared some of their gains and were trading up 29 cents at $7.09 in midday trade on Nasdaq.
Reuters – Hedge fund managers are reluctantly preparing to disclose their short positions to U.S. regulators on Monday, a move set to give a rare public glimpse into their secretive trading strategies two weeks later.
For shareholders who have blamed short sellers for driving down company stocks, it will be a chance to see who is targeting their firm.
It is also an experiment by U.S. securities regulators, putting short sellers briefly on a similar footing to large investors who accumulate stocks and are required to regularly disclose their positions publicly.
Under a temporary Securities and Exchange Commission order, big money managers will have to reveal the number and value of securities sold short each day last week.
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."
Business Week – A hedge fund known for shaking up underperforming companies has increased its stake in Cablevision Systems Corp. to 9.1 percent, according to a regulatory filing Thursday.
Harbinger Capital Partners now owns more than 21 million shares of the diversified cable operator, up from nearly 19 million shares, or 8.1 percent of Class A shares, its stake as of a regulatory filing made last month. In an earlier August filing, Harbinger disclosed that it held a 4.9 percent stake. The Dolan family owns the Class B shares.
"As we stated previously, we welcome all investors and their focus on enhancing value for all shareholders," said Charlie Schueler, spokesman for Bethpage, N.Y.-based Cablevision.
Times Online – Woolworths’ biggest shareholder has thrown his weight behind management in rejecting Malcolm Walker’s £50m takeover approach, while refusing to deny that he is planning his own bid for the struggling retailer.
Iranian property tycoon Ardeshir Naghshineh, who has built up a 10.2% stake in the firm, told The Sunday Times: “Walker is well respected but the board rejected the bid and rightly so. It’s not a good deal for Woolies or shareholders.”
Walker, founder of the Iceland frozen-food chain, has proposed a deal that would see his consortium – backed by Icelandic retail investor Baugur, also a Woolworths shareholder – take its 815 stores but leave the parent company with a near-£100m pension deficit and most of its £120m debt.
“It doesn’t leave much,” said Naghshineh. “The opportunity goes if the deal happens . . . and the liabilities are left. What is the deal for the rest of the shareholders? What are they left with?”
New York (HedgeCo.Net) – Shareholders in Falkland Gold & Minerals have approved plans to buy Bahamas-based oil exploration company BPC after a unanimous vote yesterday.
Philip Richards, head of the RAB Special Situations Fund that owns a 76 percent stake in Falkland, will pocket around £1m thanks to the reverse takeover and his vast personal stake in BPC of 300,000 shares.
While there has been some question regarding a possible conflict of interest with a hedge fund manager having that kind of stake in a company, Richards has been completely transparent in his holdings long before the meeting in which shareholders overwhelmingly approved the takeover.
"This was a deal recommended by two strong independent and separate boards, both of which concluded that it was in the best interest of all their respective shareholders," said a spokesperson for RAB.
Shareholders will get six shares of Falkland for every one share of BPC.
RAB made headlines when the fund experienced sharp declines amidst the nationalization of Northern Rock, in which they amassed a significant stake. Meanwhile, Falkland has posted losses of over 90 percent over the past four years, prompting investors in the Special Situations Fund to lose an estimated £11m.
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
Seattle Times – Five years ago, the mutual- fund world was rocked by the biggest scandal in its 80-year history.
Fund companies gave some customers trading privileges that weren’t open to everyone; those special interests — notably some hedge funds — engaged in rapid trading that netted quick profits at the expense of the average shareholder.
Headlines called it a "market-timing scandal," a misnomer since there’s nothing illegal about trying to time the market. The problem wasn’t even so much the quick-fire trades as it was the special privileges that let traders play games that the ordinary shareholder couldn’t engage in and actually paid for.
Now shareholders in scandal-tainted funds are starting to receive payments to compensate for their losses. The SEC just sent checks worth a total of $40 million to 600,000 Putnam investors. Another $18 million was distributed to some 325,000 Janus shareholders.
Guardian.co.uk – Four large hedge funds, all shareholders of Huntsman Corp, have proposed a plan to salvage a $6.5 billion buyout of the chemical company by a unit of Apollo Global Management.
But Apollo’s Hexion Specialty Chemicals unit late Thursday rejected the plan, saying Huntsman’s increased debt and decreased earnings since the deal was struck in July 2007 would no longer make a combined company solvent.
"We are not seeking to renegotiate this transaction," Hexion responded in a statement. "We are seeking to terminate it, and obtain judicial confirmation that Hexion has no obligation to pursue the acquisition or to pay Huntsman a termination fee."
Apollo’s Hexion has been locked in a legal battle to try to get out of the $28-per-share deal, reached last year at the height of the leveraged-buyout boom. Since then, the credit markets have seized up, making the math behind the deals no longer attractive. In June, Hexion filed suit against Huntsman seeking to limit its liability in the event that the deal falls apart.
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
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 Harbinger Capital Partners said on Thursday it is seeking approval from Cleveland Cliff’s shareholders to boost its ownership stake to as much as a third of the iron-ore company.
Harbinger — already Cleveland-Cliffs’ largest shareholder — opposes Cleveland Cliffs’ proposed takeover of Alpha Natural Resources, saying it believes the Alpha deal is not in the best interest of shareholders.
The fund said in a regulatory filing that it has asked Cliffs for a shareholder vote that would allow Harbinger to acquire shares that would bring its ownership up to more than one-fifth, but less than one-third, of Cliffs’ outstanding shares.
