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The Morning Brief: Forestar Avoids Proxy Fight with Carlson

Forestar Group has headed off a possible proxy fight with Dallas-based hedge fund firm Carlson Capital. Forestar, an energy and natural resources company, said on Monday that it reached a settlement with Carlson and El Segundo, California money management firm Cove Street Capital. Under separate deals, Forestar agreed to appoint a total of two new directors. They will replace two current directors, who resigned. In addition, Carlson and Cove Street agreed to vote in favor of the board’s director nominees and other proposals the board recommends to shareholders.

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Jeffrey Smith’s Starboard Value cut its stake in Darden Restaurants to a little more than 9.3 million shares, or 7.3 percent of the restaurant company’s total outstanding. The sales are part of a newly created planned stock sale plan under SEC Rule 10b5-1. Under the plan, Starboard intends to unload 30 percent of its stake, subject to certain volume and pricing thresholds. Starboard says in a regulatory filing it is selling the shares as part of a plan to rebalance its portfolio due to the significant appreciation in the stock price since the investment was made over two years ago. In 2014 the activist won its proxy fight with Darden.

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Activist investor Engaged Capital has boosted its stake in Outerwall to more than 2.3 million shares, or more than 14 percent of the total outstanding. In a regulatory filing, Engaged, headed by Glenn Welling, said it bought the stock of the company best known for its Redbox movie rentals and Coinstar cash exchange kiosks because they “were undervalued.” The regulatory filing stresses that Engaged does not have a plan or proposal for unlocking this value. However, the filing did say in standard boiler-plate language that the hedge fund firm may take some sort of undefined future action. Several years ago, Outerwall was a target of another activist: Barry Rosenstein’s Jana Partners. However, the New York hedge fund firm eventually liquidated its position after Outerwall announced a stock buyback.

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Viking Global Investors participated in the $6 million Series A financing of EpiBiome, an agriculture technology company.

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