Activist Hedge Fund Again Warns Yahoo Against Making a Big Acquisition
(DealBook) – With speculation picking up among investors about Yahoo going on a shopping spree, an activist hedge fund that has taken a position in the company has again publicly declared its opposition to such a move.
The hedge fund, Starboard Value, urged Yahoo in a public letter on Thursday to announce plans to divest its minority stakes in the Alibaba Group, the Chinese Internet giant, and in Yahoo’s publicly traded Japanese affiliate. That plan, however, should not include large acquisitions – like takeovers of media companies like CNN.
Starboard, however, would be fine with one particular deal: an acquisition of a fellow old-line Internet company, AOL. Starboard owns stakes in both. Should Yahoo ignore those warnings, the hedge fund said, the company could face a bruising board fight.
Read the entire article at DealBook
More coverage: BusinessInsider and ValueWalk
Trian Management’s DuPont Analysis Includes Breakup, Proxy War
(Forbes) – In the 1920s, chemicals and materials giant E.I. DuPont de Nemours invented a way to judge the returns on its internal investments for shareholders, a formula that became a staple of Wall Street security analysis. Now, nearly a hundred years later, one of the company’s largest shareholders is arguing that DuPont is overly complex, inefficient and should be broken apart.
On Thursday evening, Nelson Peltz of activist hedge fund Trian Management said that after failing to negotiate a settlement with DuPont, the firm will run a proxy campaign against the over 200-year old company, nominating four directors. Trian is one of DuPont’s largest shareholders, holding a stake of 24.4 million shares worth just under $2 billion, nonetheless, the fund will need the support of DuPont’s many other shareholders. The hedge fund owns less than 3% of DuPont’s outstanding shares, a small percentage when compared against some proxy campaigns.
Read the entire article at Forbes
More coverage: The Wall Street Journal and The Financial Times
Hedge Fund Scores Win for Appraisal Arbitrage Strategy
(Reuters) – A Delaware court has ruled in favor of an increasingly popular strategy in which hedge funds buy the stock of a company targeted in a merger and then litigate for a bigger payout on their shares.
In a pair of Monday rulings, Sam Glasscock, a vice chancellor of the Court of Chancery, ruled that Radnor, Pennsylvania-based hedge fund Merion Capital could seek an appraisal of its 1.8 million shares in Ancestry.com and its 7.6 million shares in BMC Software Inc.
The decisions hinged on whether Merion could ask a judge to value the stock even though Merion did not vote against the 2012 buyout of genealogy website Ancestor.com by private equity firm Permira and the 2013 acquisition of software company BMC by Bain Capital and Golden Gate Capital.
Read the entire article at Reuters
More coverage: The Wall Street Journal and FINalternatives
Dutch Pension Fund PFZW Drops Use of Hedge Funds
(Reuters) – The Netherlands’ PFZW has become the latest major pension fund to announce it will no longer use hedge funds to manage investments, citing excessive costs, complexity and a lack of performance.
The fund, which represents around 2 million workers in the health care sector, had 156.3 billion euros ($184.7 billion) in assets under management as of September 2014.
About 2.7 percent of the fund’s assets had been invested with hedge funds in the year 2013, but the pension fund said on Friday that it had “all but eradicated” their use by the end of 2014.
Read the entire article at Reuters
More coverage: Financial News and DutchNews
