Activist investor Emanuel J Friedman and his EJF Capital went active on Alexander & Baldwin (ALEX) earlier this month. The standout thesis is to get the company to spin off its real estate leasing business. EJF Capital started building a stake in the Honolulu based company earlier this month believing shares were undervalued. The fund now owns a 5.4% stake in ALEX.
ALEX shares had been on a downhill slide since April, falling by 13% the last three months and off 8% year-to-date.
EJF is having discussions with management about changes that include focusing on capital allocation, returning capital to shareholders through share buyback, improving the company's debt structure and separating the Real Estate Leasing Business from the company's other attractive assets.
Now - activist investor EJF Capital is not the first company to put pressure on Alexander & Baldwin to spin off its operations. In 2011, Bill Ackman's [six part getting to know Bill Ackman here] hedge fund firm Pershing Square had also initiated similar action to split transportation and logistics units of the company from real estate and agriculture operations. At that time, ALEX was on the downhill side. After the split, the company's share price shot upwards reaching record high of $52 in May 2012.
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