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Activist Stocks: Blackrock Is The Latest Activist Bully

Activist amigo - not a light day today. News and stories for June 12 below - as usual the free newsletter is on a 24-hour delay; Activist Strategy subscribers get it on publication day - get on that 2-week free trial here. As usual, tip us off at @activiststocks and you can here is the free daily newsletter sign up.

News-

  • Pep Boys added three directors to the board, ending a potential proxy battle versus Gamco. Recall Pep Boys could be a buyout target. More to come on this via Activist Strategy.

  • The Jana Partners news of a United Rentals stake is grossly overexaggerated; not a new stake [story to follow]

  • However, Jana and Barry Rosenstein need to get their shit together at Walgreen - there has been a lot of funny things going on in the top ranks - just yesterday a board member elected in May resigned, citing wanting to spend more time at home [story to follow]

  • OM Group gets a letter from yet another shareholder. This time Wynnefield Capital, taking the company to task over the Apollo Group buyout [link to thoughts]

  • Vertex Capital goes active on Numerex ($170m market cap play on machine-to-machine solutions). Has a 5.6% stake; shares up 10% on the news. Vertex said Numerex has shortcomings in its growth strategy and level of transparency. Wants strategic opportunities to maximize shareholder value, particularly in light of the significant consolidation occurring in the industry.

  • Monarch Alternative Capital is active at Scorpio Bulkers, owning 18.9% of the $300m market cap shipper. No plans were laid out.

  • Vertex Capital is also now active at Maxwell Technologies with a 5.1% stake. Vertex notes, Vertex wants a  credible plan to better align costs with revenue to get back to profitability. It also doesn’t want the company to do a dilutive equity offering.

  • Got an exact number on the Valeant share sale by ValueAct - 4.2 million [link]

Stories-

  • @geoffcolvin at Fortune get in over his head with a piece on the rise of indexing, which is giving Vanguard and Blackrock more power over activist investors. Geoff notes, “Activists will become less important. They create value by spotting opportunities to improve a company’s performance. But as the largest institutions pay closer attention to their portfolio companies, they’ll spot more opportunities on their own, and activists’ influence will wane. Boards should expect to hear directly from major institutions, without publicity, more often” [link] This weekend feature for Activist Strategy will be fun, where it’s time to big index funds to task over activism - at the day they have no vested interest in holding companies more accountable, it’s a win-win for them.

Bain Graphic .gif
  • Bain & Company has the ultimate breakdown for protecting yourself against activist investors. Pretty decent piece - can’t really give you the takeaway since there’s a lot packed, but the graphic below is telling [link]

What we’ve been working on-

  • Understanding ValueAct’s next move, following the Valeant selloff [partial paywall]

  • Digging into Citrix, story to follow