In just two days’ time, a hedge fund has managed to do for Gateway Inc. what its own earnings reports, pledges of growth in new markets and new CEO haven’t been able to do for months: get investors to once again take notice of the nation’s No. 3 personal-computer company.
On Tuesday, shares of Gateway shares climbed as much as 12% after the disclosure by Birmingham, Ala.-based Harbert Management Corp. that it has acquired 10.2% of Gateway’s outstanding stock.
And late Tuesday, Gateway said it received an unsolicited inquiry to acquire its retail operations from Lap Shun (John) Hui, owner of Joui International and a former owner of e-Machines. In a separate statement, the investor said he offered to buy the retail operations for $450 million and said he also would consider buying all shares of Gateway. The computer company said it would review the proposal.
Harbert, which is probably best known for making a market through trading in the debt of financially weak companies, said in letter to interim Chief Executive Rick Snyder that it’s “enthusiastic about our investment and the prospect of committing time and effort to help you in your endeavors.”
Whether Gateway goes much beyond the 19% gain its stock has recorded this week may hinge on what Harbert has in mind for the company. Harbert’s letter said “there is nothing wrong with Gateway which can’t be fixed by what’s right with Gateway,” but the firm wasn’t specific about a prescription for change.
The letter, attached to a regulatory filing, was signed by Scott Galloway, founder of consultancy Firebrand Partners, which Harbert is retaining to advise on its Gateway investment.
David Hallisey, a spokesman for Irvine, Calif.-based Gateway, said the company held “a productive preliminary conversation,” with officials from Harbert last weekend
