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.
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
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.
West Palm Beach (HedgeCo.net) - Harbinger Capital Management, an activist hedge fund, has accumulated a 4.9% stake in Cablevision Systems Corp, according to The Wall Street Journal.
In a regulatory filing, Harbinger said that it had bought 11.45 million of Cablevision’s Class A shares. Harbinger, now Cablevision’s fifth biggest shareholder, was not present at meetings with the company’s top executives and large investors this week, the Journal said, citing a person familiar with the meetings.
The move may have prompted CEO James Dolan to explore options. Cablevision shareholders rejected a $36.26-a-share buyout from the founding Dolan family last October. That bid was the family’s fourth attempt to take the company private.
The Dolan family owns 75% of the voting rights for Cablevision. It remains unclear what Harbinger intends to do with its holding. Harbinger isn’t currently planning a proxy fight with the company, said a person close to the company.
Cablevision last month acquired 97% of Newsday Media Group ("Newsday") through the formation of a new partnership with Tribune Company. For Cablevision, the completion of this transaction adds a complementary print and online media group with local content in the New York area.
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New York Post – After months of falling financial stocks and rising oil prices, July’s sudden turnaround was a welcome relief to average investors.
Not so for hedge funds – including subprime-mortgage superstar Phil Falcone.
That’s because a number of smart-money investors, including Falcone’s Harbinger Capital Partners, got slammed when oil took an unexpected dive, and Wall Street stocks suddenly popped in mid-July.
It was the exact reversal of otherwise long-winning bets that energy prices would continue to climb and financial firms would keep getting pummeled.
"July will be bad in aggregate for the hedge fund industry," said Veryan Allen, who advises large investors on hedge funds. "The short squeeze in financial stocks and the oil selloff has hurt quite a few," he said.
New York (HedgeCo.Net) – New York’s top 100 hedge funds are in trouble and can’t seem to get out of the red, according to performance reports obtained by the New York Post.
Prominent hedge funds are still trying to recover from the credit crunch and unless they see a turnaround soon, 2008 could be the first year that hedge funds as a whole lose money since 2000.
Big time fund Appaloosa, who manages about $4 billion, is down almost 18 percent this year, compared to returns of 8 percent and almost 25 percent in ‘07 and ‘06 respectively.
Cantillion Capital Management, another monster fund that has $2 billion tied up, is closing in on 20 percent when it comes to losses this year. And the $10 billion Tontine Associates isn’t faring so well either. The fund is down 17 percent after an amazing 2007 where it posted returns of 40 percent. QVT Financial was another fund that saw 40 percent returns in ’07, only to be down over 6 percent this year.
It’s not all bad news, however. Some fund managers are just destined for success. John Paulson’s fund, Paulson Advantage is up over 18 percent this year after a record breaking 2007. Phillip Falcone of Harbinger Capital is riding high with returns of over 40 percent so far.
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
Seeking Alpha- In a 13G filing after the close Friday on Sunoco, Inc. (SUN), Philip Falcone’s Harbinger Capital disclosed a 6.6% stake (7,732,600 shares) in the company. The hedge fund did not show a stake in Sunoco at the quarter ended 03/31/08.
A 13G indicates a ‘passive investment’, but Harbinger is a known activist investor. Most recently, Harbinger called on Cleveland-Cliffs (CLF) to cancel its merger with Alpha Natural Resources Inc. (ANR), saying it was not in the best interest of shareholders.
Sydney Morning Herald- The ownership structure of some of Australia’s largest mining companies could be set for a major change after New York hedge fund Harbinger Capital Partners has indicated it believes commodities prices could be nearing their peak.
Harbinger, which has substantial stakes in Australian miners Fortescue Metals, Murchison Metals, Midwest and Moly Mines, has emerged as an opponent of US iron ore miner Cleveland-Cliffs’ proposed $US10 billion acquisition of coalminer Alpha Natural Resources.
Cliffs – which has an 85 per cent stake in West Australian iron ore miner Portman Mining – wants to merge with Alpha to form a more diversified supplier to the steel industry. But Harbinger, which owns 18.4 per cent of Cliffs, has told the US Securities and Exchange Commission it believes the deal is "not in the best interest of shareholders".
New York (HedgeCo.Net) – Inmarsat shares took a dive yesterday after hedge fund Harbinger Capital halted talks of a possible takeover. Harbinger has amassed a 28 percent stake in the U.K.-based mobile satellite communications group.
Harbinger, who has AUM upwards of $26 billion, decided to hold off after considering the lengthy process ahead in which they would have to gain clearance from the FCC.
“Harbinger remains interested in acquiring control of Inmarsat and is therefore actively considering whether to pursue the relevant regulatory and competition approvals in order to be able to make an offer for Inmarsat in the future,” the company said.
The hedge fund expressed interest in the company in hopes that Inmarsat might contribute to a U.S development of a satellite-based mobile phone network.
“Assuming there is an acceptable conclusion to the regulatory approval process, Harbinger would intend to re-enter into discussions with the board of Inmarsat regarding the terms of an offer and endeavour to seek a recommendation from the Inmarsat board at that time,” they added.
Harbinger isn’t the only hedge fund as of late to accumulate shares in Inmarsat. Landsdowne Partners and Lehman Brothers have also been tapping into this market in hopes of consolidation in the industry.
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- U.S. hedge fund Harbinger remains interested in buying British satellite communications firm Inmarsat, but is suspending talks for now because of the lengthy regulatory process involved, it said on Monday.
"Harbinger remains interested in acquiring control of Inmarsat and is therefore actively considering whether to pursue the relevant regulatory and competition approvals in order to be able to make an offer for Inmarsat in the future," the group, which already owns 28 percent of Inmarsat, said in a statement.
"Assuming there is an acceptable conclusion to the regulatory approval process Harbinger would intend to re-enter into discussions with the board of Inmarsat regarding the terms of an offer and endeavor to seek a recommendation from the Inmarsat board at that time."
Times Online- Shares in Inmarsat, the mobile satellite communications group, plunged 12.2 per cent today after it emerged that Harbinger Capital, the activist American hedge fund investor, has suspended talks over a possible takeover.
While both parties left the door open to a future deal, Inmarsat’s stock lost 62.75p to fall to 449.75p in early trading.
Harbinger, which owns 28 per cent of Inmarsat, has put talks on hold to consider the lengthy regulation involved in such a deal, which could take up to 18 months.
The hedge fund would have to gain clearance from the Federal Communications Commission, the US industry watchdog that oversees the sector in a similar way to Ofcom in Britain.
West Palm Beach (HedgeCo.net)- US hedge fund Harbinger has increased its stake in Australian iron ore miner Midwest Corp. Ltd. to 12.53%, an effort to block Chinese iron ore trader Sinosteel Corporation’s takeover of the latter.
Harbinger, a major shareholder of Murchison Metals Ltd., increased its stake in Midwest to 10.53% on July 14 and 12.53% later, compared to a 9.1% it owned earlier in the year.
Murchison Metals, which has a 9.98% stake in Midwest, said days ago that it would give up the proposal for a merger with Midwest. However, it would also refuse to sell it’s stake to Sinosteel.
Sinosteel had a 19.89% stake in Midwest when it filed an AUD 6.38-per-share bid for the latter. It had increased its stake in the Australian miner to 50.97% by July 10. In addition to a 4.1% stake four Midwest directors promised to sell to it, the company’s stake in Midwest has increased to 55.07% in total.
Harbinger is owned by the Harbert Managment Corporation, which has committed capital and assets under management which have grown from $1.5 billion in 2002 to $22.9 billion as of March 1, 2008.
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