The Morning Brief: Elliott Takes Stake in Interpublic Group
Paul Singer’s Elliott Management Corp. has established a new activist position. The New York–based hedge fund firm disclosed on Thursday that it owns nearly 28.4 million shares of The Interpublic Group of Companies, Inc., or 6.7 percent of the total outstanding shares. Of this stake, 10.5 million shares represent options that are exercisable within 60 days. Altogether Elliott’s total economic exposure is 6.7 percent of the shares, according to a regulatory filing. Elliott says it is seeking “a constructive dialogue” with the board of directors about ways to boost shareholder value. The rest of the filing contains standard boiler-plate language used by activists.
Another billionaire hedge fund manager is getting divorced. Citadel founder Kenneth Griffin has filed for divorce from his wife, Anne Dias Griffin, according to a Chicago Tribune report which cites his lawyer. “A petition for dissolution was filed on his behalf today,” his attorneys at Berger Schatz reportedly said in a statement. “This is a personal matter, and the family asks for privacy as they work through this process and focus on the well-being of their children.”
An attorney for Dias Griffin, who previously ran her own hedge fund, Aragon Global Management, at one time from Julian Robertson, Jr.’s Tiger Management office in New York, reportedly said in her own statement: “Ken Griffin unilaterally filed a divorce petition today with no notice to either me or my client, knowing full well that she had just left for summer vacation with their three young children and would therefore be unable to respond. Anne’s highest priority remains her family, especially the well-being of her children. She is hopeful that this personal matter can be resolved privately and in the best interests of her children. We have no further comment at this time.” Earlier this year it was reported that Appaloosa Management’s David Tepper is seeking a divorce from his wife.
Jeffrey Smith has once again turned up the heat on Darden Restaurants. The activist hedge fund manager, a co-founder of New York–based Starboard Value, disclosed in a regulatory filing that his firm filed a complaint in a Florida Circuit Court seeking an order to require Darden to provide Starboard with certain books and records “in order to gain additional insight and learn more as to the analyses, processes and rationale that ultimately led” Darden to sell Red Lobster on May 16 “at what Starboard believes to be a fire sale price to Golden Gate Capital.”
Starboard had earlier received support from 57 percent of the shares for its consent solicitation to call a special meeting. Starboard adds that since the Red Lobster sale, Darden’s stock has fallen by 11 percent and lagged its peers by 16 percent. “Starboard has attempted to negotiate in good faith the conditions” for Darden “to turn over the requested records, even going so far as to narrow its request voluntarily in an effort to get to resolution,” the firm states in its complaint. However, it laments that Darden “was not willing to accept reasonable terms regarding confidentiality restrictions.”
In a year when most major macro funds are in the red, one fund is bucking the trend. The $3.5 billion, New York–based Autonomy Global Macro fund is up 8.9 percent in the first six months of 2014.
Now this is what you call a “dis.” Stifel Nicolaus raised its rating on PepsiCo — a major activist holding of Nelson Peltz’s New York–based activist firm Trian Partners — to Buy from Hold, citing a number of reasons including valuation factors. The investment bank said in a note to clients that it thinks “the company is entering a period of positive earnings revisions, reflecting stabilizing Americas beverages trends, abating input pressures, increasing emphasis on productivity, and increasing effectiveness innovating.” However, the activist’s presence is not a factor in the upgrade. “We also believe the shares embed very little value for Trian’s influence, even though Trian could ultimately gain a seat on PepsiCo’s board,” Stifel asserts in its note.