The Morning Brief: Barington Turns Up Heat on The Eastern Company
Barington Capital Group’s James Mitarotonda sent a letter to John Everets, a director of The Eastern Company, protesting the company’s recent bylaws change and decision to add directors that the New York-based activist investor deems to have close ties with Everets, as well as criticizing the company’s governance practices. The hedge fund manager specifically questioned the board’s recent decision to amend its bylaws, without shareholder approval, to enable it to fill a vacancy created by an increase in the number of directors and then move to expand the number of directors and use the new authority to appoint James Ozanne. Mitarotonda is also miffed that the board changes are scheduled to take place right after the upcoming annual meeting, where Barington has two nominees up for election.
“We strongly encourage you and your fellow directors to promptly reconsider this important matter and publicly announce that Eastern will restore the bylaws to their previous state” and not appoint Ozanne, Mitarotonda states in the letter. He also questions Everts’ close relationship with Ozanne and Samantha Allison, whom the board nominated for election, noting that she has never served as a director for a public company and previously worked with Everts. Eastern is a maker of hardware, security products and metal casings.
Paul Singer’s Elliott Management Corp. reported that it owns 7.5 percent of Swedish surveillance camera maker Axis, according to Reuters. The New York hedge fund firm no doubt is hoping Japan’s Canon will boost its $2.8 billion bid to acquire Axis.
Louis Bacon’s Moore Capital Management disclosed that it owns 1.25 million shares, or 6.7 percent, of Levy Acquisition Corp., a blank check company founded by restaurant industry veteran Larry Levy that went public in November 2013. LAC is in the process of acquiring Del Taco Holdings, a Mexican restaurant chain. LAC then plans to change its name to Del Taco Restaurants. Moore’s disclosure was made in a 13G filing — rare for the New York macro firm — which suggests a passive investment.
Keith Meister’s New York-based activist hedge fund firm Corvex Management bought 235,000 shares of Signet Jewelers from January 30 through March 10, boosting its stake in the retail chain to 7.2 percent.
Balyasny Asset Management disclosed that it established sizable stakes in two separate oil and gas services companies as of March 18. In one filing, the Chicago hedge fund firm said it owns nearly 4.3 million shares of Tetra Technologies, or 5.39 percent. In a separate filing, the firm disclosed a stake of nearly 2.26 million shares of Basic Energy Services, also 5.39 percent of the total outstanding.