Activist Investor Jeff Ubben Pain
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Starboard Value takes its DepoMed stake up by 35%. They now own 9.2% and went activist at the end of last month, possibly pushing for a buyout of the company.
Nelson Peltz’s Trian Fund and Shanda Group entered into an agreement for Shanda to buy shares Of Legg Mason owned by Trian (9.9% of the co.). Trian is selling shares for portfolio management reasons and believes that Shanda is a good strategic partner for Legg Mason.
Raging Capital sells off its passive stake in Outerwall; previously owned 6.8%. Our own deep profile of Raging and Bill Martin.
Engaged Capital settles with Outerwall. Engaged owns 14.6%. Outerwall has put 1 new director on the board and agreed to add 2 news independent directors submitted by Engaged. Recall that Barry Rosenstein and Jana Partners were activist here.
Board drama: Ed Corcoran stepped down from the Insignia Systems board last month. In a new letter, he said "the current dynamic of the board is not conducive for me to effectively discharge my duties as fiduciary," and that other directors had been unfair to him and fellow board member Nick Swenson. Swenson is one of Insignia's largest shareholders, controlling 18% of the company. The only investor who controls more is Biglari Holdings, led by Sardar Biglari, which controls 19.9%. Swenson, who runs Groveland Capital, tried to take over several seats on Biglari Holdings last year but was unsuccessful. Quite an adventure/dynamic; full letter here.
Land and Buildings makes comments on MGM Growth Properties IPO and MGM Resorts, says believes MGM Growth Properties IPO is fairly valued at $19.50 per share IPO midpoint and that the MGM REIT is superior to its peer Gaming and Leisure Properties. Also notes, from a corporate governance perspective, MGM REIT is inferior to GLPI and problematic on numerous levels. Says full value can be unlocked by including all properties in REIT, eliminate overlap on board/management team of MGM Resorts, MGM REIT. Detailed thoughts on MGM as part of Activist Strategy.
U.S. lawsuit against activist investor Jeff Ubben and his ValueAct Capital puts mutual funds on alert [link] But Briggs agreed that the case highlights the blurring boundaries between activist and traditional fund managers. A Jeff Ubben and ValueAct Capital win could further cloud the issue, while a government victory could prompt major investors to dial back pressure on companies. A managing director at a large asset manager, speaking on condition of anonymity, said that he and his colleagues routinely discuss business improvement and executive compensation with company executives, believing such topics do not cross legal lines. The Jeff Ubben and ValueAct case could change that interpretation, the manager said.
Other good reads
BNY Mellon's activist board member praises progress, even as stock slumps [link]
Hedge-Funder Bill Ackman Is a Star at Tribeca Film Festival, Even As He’s Losing Billions [link]
Dan Loeb's Hedge Fund Is Biggest Winner in Dan Loeb's Reinsurer [link]
Read more about activist investing
King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone [link]
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