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The Morning Brief: Hedge Fund Takes Activist Stake in Signet
A lesser-known hedge fund firm has taken an activist stake in popular hedge fund and activist stock Signet Jewelers. Bethesda, Maryland-based Abrams Bison Investments disclosed in a regulatory filing that it owns 6 percent of the jewelry retailer. In the filing, the hedge fund manager says, in standard boiler-plate language, that the stake was taken for investment purposes and that it has no plan or recommendation for the company. However, it did say it has met — and plans to continue having discussions with — management and the board of directors regarding ways to boost the company’s value, including alternatives regarding Signet’s “strategic evaluation of the credit portfolio and capital structure.”
Abrams Bison had a U.S. stock portfolio valued at nearly $1.1 billion at the end of June. At the end of the second quarter, Signet enjoyed the second-highest concentration among hedge fund investors, who held 25 percent of its market value. Signet’s third-largest shareholder was New York activist hedge fund firm Corvex Management, while its tenth-largest investor was San Francisco activist Marcato Capital Management.
Shares of hedge fund favorite Yahoo dropped 3 percent on Friday, to close at $42.80, after the Internet pioneer disclosed that a hacker breached the accounts of some 500 million users. Even so, the stock is still up about 30 percent for the year. In late July, Verizon Communications agreed to acquire Yahoo’s core Internet assets for a little more than $4.8 billion.
At the end of the second quarter, at least 102 hedge funds held a position in the stock, according to research from Goldman Sachs. They include Chris Hohn’s London-based TCI Fund Management, the largest shareholder of this group. Other top hedge fund holders included Los Angeles-based Canyon Partners, New York-based Owl Creek Asset Management and New York activist firm Starboard Value, which partly put Yahoo in play.
Shares of popular hedge fund stock Endo International jumped more than 15 percent, to close at $23.39, after the drug maker named a new president and chief executive officer. Even after Friday’s move, the stock is still down 38 percent for the year, however. At the end of the second quarter, New York-based Paulson & Co. was the fifth largest shareholder. Other top shareholders included Greenwich, Connecticut-based AQR Capital Management and New York-based PointState Capital.
Shares of cybersecurity software firm Imperva jumped more than 20 percent on Friday, to close at $46.43, in response to a Bloomberg report that Cisco Systems and IBM might be interested in taking over the company. New York-based Elliott Management Corp. is the second-largest shareholder.