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 – Capmark Financial Group Inc., the commercial real estate company created through a 2006 leveraged buyout of certain GMAC assets, is preparing to file for bankruptcy possibly by the end of next week, according to a source with direct knowledge of the situation.
The company, which owns a bank that will continue to operate while it is in court, is in negotiations with lenders, bondholders and the Federal Deposit Insurance Company that will result in a filing by the end of October at the latest, the source said.
New York Post – “Malone’s a hybrid guy,” said one media mergers-and-acquisitions banker. “He operates Liberty with as much of a financial focus as a strategic focus and he looks at deals like a leveraged buyout investor would.”
Indeed, Liberty at one point was close to being classified as a hedge fund instead of an operating company because it owned pieces of so many firms without running any of them.
Plus, Malone is aggressively opportunistic in his practice of building up minority stakes in firms like Time Warner or News Corp., and then swapping the stakes for control of an asset, such as the Atlanta Braves or DirecTV.
Free Internet Press – With the leveraged-buyout business on life support, major private-equity firms such as the Carlyle Group are taking a closer look at the battered banking sector as a way to make money for their clients.
Last September, Washington, D.C.-based Carlyle invested $75 million in Boston Private Financial Holdings. Last month, it was part of a group that injected $900 million into Florida’s BankUnited. Carlyle was part of a group looking to buy Atlanta, Georgia-based Silverton Bank earlier this month, until regulators decided to liquidate the institution instead.
Private-equity firms have long eyed the financial services industry, but the sector took a back seat over the past two decades as private equity pursued fat returns fueled by leveraged-buyout deals. Until recently, those buyouts helped Carlyle generate an annual net return of 26 percent across the firm..
New York (HedgeCo.Net) – CSX is finding themselves in the middle of another battle, this time with a shareholder who is suing the railroad company along with hedge funds TCI and 3G Capital Partners.
Shareholder Deborah Donoghue is seeking the recovery of “short swing” profits from sales conducted by the two hedge funds between August and September 2007. She is hoping to recover profits from the sale of shares by the funds, before they announced their plan to launch a proxy battle and shake up the Board of Directors.
Donoghue is claiming that TCI and 3G sold 2 million shares of CSX stock and within six months, bought a large amount of shares and derivatives equal to shares of CSX common stock at lower prices.
“Such profits are recoverable on behalf of CSX by plaintiff as a shareholder of CSX, the latter having failed or refused to act in its own right and for its own benefit,” stated the complaint.
Donoghue isn’t the only one who believes the hedge funds didn’t act in good faith. CSX has been in a battle with the two funds ever since they exerted their controlling stakes to take over four board seats on the Jacksonville, Florida based company after a drawn out proxy battle.
CSX had argued that the funds “secretly coordinated” their fight to gain the seats on the board while failing to disclose their full stake in the company. The judge eventually ruled with the hedge funds, allowing them to vote their shares at the company’s annual meeting in June.
Hedge funds are not required to report to the Securities and Exchange Commission, thus these “short-swing” profits were not publicized.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Hedge fund TCI has won two more seats on the board of railroad operator CSX, in what looks to be the finale of a year-long proxy battle.
A U.S. Court of Appeals judge ruled yesterday in New York upheld an earlier ruling that the court did not have the power to stop both TCI and fellow hedge fund investor 3G Capital Partners from voting shares at CSX’s annual meeting. The ruling came despite the fact that the funds had supposedly violated certain disclosure agreements through their accumulation of equity swaps.
The June 25 shareholders meeting in Jacksonville, Florida was anything but decisive, with the head of CSX Michael Ward telling reporters that the vote was too close to call. While CSX did concede two of the seats to 3G Managing Director Alexandre Behing and Gilbert Lamphere, former head of Canadian National Railway Co., the hedge funds claimed that they had in fact won four of the 12 seats.
"It is time for the entire duly elected Board, including Chris Hohn and Tim O’Toole, to get to work and make progress on the shareholder mandate they received in June,” the hedge funds said in a statement after yesterday’s ruling.
The four new board members will be seated when the company’s annual meetings reconvene on September 24th.
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) – CSX looks to be cutting some slack to the two rebel hedge funds that have been on a quest to restructure their board of directors.
The railroad company said that it will give two seats to members of the slate first proposed by TGI and 3G Capital Partners and elected during the proxy battle last month.
The seats will go to 3G Managing Director Alexandre Behing and Gilbert Lamphere, former head of Canadian National Railway Co.
However, the hedge funds are claiming they won another two seats on the board. CSX fails to recognize this victory, claiming the election was too close to call.
CSX is planning on reviewing the voting process as early as next week for both TCI head Christopher Hohn and Managing Director of the London Underground Timothy O’Toole. However, the process could take several months.
“We believe the certification process will confirm that shareholders have elected four of our nominees to the CSX board. This latest tactic should be seen for what it is—a cynical attempt to thwart the expressed will of CSX shareholders,” stated the hedge funds.
The much anticipated annual shareholder’s meeting was held at the company’s headquarters in Jacksonville, Florida on June 25th where the board of directors was set to be nominated. Reporters were disappointed when CSX head Michael Ward abruptly ended the meeting and told the public that results were not readily available.
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) -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
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
