The Morning Brief: Jana Partners Moves On; Jeffrey Gundlach Shorts Not-So-Gourmet Burrito Maker

Fresh from its apparent defeat in the Agrium proxy war, Barry Rosenstein’s Jana Partners has moved on to another target. The hedge fund firm disclosed a 7.4 percent stake in specialty chemicals company Ashland, calling the shares undervalued and an attractive investment opportunity, according to a regulatory filing. It also said it has had discussions with management relating to the business, corporate structure, capitalization, operations, strategy and future plans, and these discussions will continue. Ashland’s stock closed up 2.2 percent on Thursday, even though Jana reported its stake after the market closed for trading. Earlier this week Jana appeared to have lost its proxy fight against Agrium.

Flip flop at J.C. Penney. On Thursday Pershing Square Capital Management’s William Ackman, who has staked reputation in part on the struggling retailer’s future, announced that Penney will once again put coupon advertising in newspapers.Speaking at a real estate conference in New York, Ackman conceded that the former Penney CEO Ronald Johnson and several of his hires did not work full-time out of Penney’s Plano, Texas, headquarters but commuted from California and New York.

Shares of Herbalife surged 3.09 percent to $38.37 on news that former KPMG partner Scott London on Thursday was charged with passing insider information about the nutrition supplements company and Skechers USA in return for cash, jewelry and concert tickets. The executive was charged with one count of conspiracy to commit securities fraud, according to prosecutors. Among other information, London reportedly passed on a tip that Herbalife was considering going private. If that ever transpired, it would be bad for William Ackman, since it would end any hope of the stock price collapsing.


Speaking from experience? Chipotle Mexican Grill, a high-profile short of Greenlight Capital’s David Einhorn, dropped more than 3 percent Thursday, after another hedge fund manager, Jeffrey Gundlach of DoubleLine Capital, said he is short the casual dining chain. Speaking at DoubleLine’s annual luncheon at the Yacht Club in New York, Gundlach reportedly said “Gourmet burrito is an oxymoron.” He could have taken an activist stake in the company and purport to know how to turn it around.

Another top person at Kenneth Griffin’s Citadel is leaving the Chicago firm. Jamey Thompson, co-head of the Chicago hedge fund firm’s global credit group, has resigned, ostensibly “to be with family.In September Thompson, who worked at Citadel for five years, was named one of three co-heads of Citadel’s credit group in September, when the firm merged its quantitative credit and convertible-bond teams.

John Paulson’s Paulson & Co. and Peter Schoenfeld’s P. Schoenfeld Asset Management said they will support T-Mobile USA’s offer to acquire MetroPCS after deal terms were amended. The hedge fund managers, which had initially criticized the arrangement, warmed up to the pact after the combined company reduced the amount of debt assumption by about $3.8 billion and improved the interest rate on the debt. Deutsche Telekom also agreed to retain a stake in the newly combined company for 18 months instead of six months. The German telecommunications provider will own 74 percent of the new company and MetroPCS shareholders will own 26 percent of the company.

Steven Cohen’s SAC Capital Advisors disclosed a 5.1 percent stake in American Woodmark Corp., a maker of kitchen cabinets and vanities.