Paul Singer’s Elliott Management on Monday announced it owns 8.4 percent of American Capital. The New York multi-strategy fund, which also frequently engages in activism, urged shareholders to vote against the Bethesda, Maryland private equity and venture capital firm’s plan to spin out its business development company (BDC) assets, creating a standalone asset manager, arguing the move “will put valuable assets at risk,” entrench management and significantly limit the company’s ability to boost the stock’s value. Elliott added that it estimates the stock is worth at least $23 a share. The stock on Monday rose nearly 3 percent, to close at $14.71. Elliott called on the board to add independent directors “with relevant experience and fresh perspectives to challenge management and hold them accountable.”
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Ricky Sandler’s Eminence Capital has teamed up with Scott Ferguson’s Sachem Head Capital Management in its activist campaign against Autodesk. We reported earlier this month that Sachem Head had acquired 5.7 percent of the San Rafael, California maker of 3-D design software, noting that the New York hedge fund planned to hold discussions with management, the board and shareholders regarding a variety of issues. On Monday, Eminence said in a regulatory filing that it owns 5.8 percent of the shares. After the close of business on November 13, Eminence and Sachem Head agreed to coordinate their efforts, according to a regulatory filing. Altogether, the two hedge funds own a combined 11.5 percent of the total shares outstanding. Shares of Autodesk rose about 0.8 percent to close at $60.93.
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Sandell Asset Management received partial support from the major proxy research firms in its battle with Ethan Allen Interiors. The New York activist hedge fund said Institutional Shareholder Services (ISS) recommended that shareholders of the Danbury, Connecticut furniture retailer vote for three of its six nominees. However, ISS did not support the other three. Yet, in a press release, Sandell proclaimed that “ISS supports our contention that change is needed at Ethan Allen in order to deliver value to all shareholders.” Another major proxy firm, Glass Lewis, has fully supported Ethan Allen’s slate of directors. Ethan Allen issued its own press release proclaiming that both ISS and Glass Lewis have recommended that shareholders “reject efforts by Sandell” to replace six directors. Ah, you have to love the spinmeisters.
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Larry Robbins’ New York-based Glenview Capital, which has suffered a huge beating from its health-care stocks this year, said in a regulatory filing that as of November 12 it had boosted its stake in Tenet Healthcare to 17.95 percent of the shares. Shares of the Dallas hospital management company Monday jumped 2.65 percent to $32.55 on the news.
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Christopher Hohn’s London-based The Children’s Investment Fund Management disclosed it tripled its stake in New York-based American Express. This is one of six equities in the hedge fund’s U.S. equity portfolio, which is valued at $5 billion, up from $4.3 billion at the end of the second quarter. Altogether, the firm had $8.8 billion under management at the beginning of the year.
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Eric Mindich’s Eton Park Capital Management boosted the size of its U.S. stock portfolio from $4.14 billion at the end of June to $5.74 billion at the end of the third quarter. The New York-based multi-strategy firm had a total of $9 billion under management at the beginning of the year.
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Credit Suisse cut its price target on Walgreens Boots Alliance from $110 to $100, noting that the landscape for drug retailers is becoming increasingly challenged. “The company’s updated earnings outlook indicates that an investment case built on closing the margin gap to CVS may not be realistic without a more dramatic change in the model,” the bank adds in a note to clients. The bank stresses that reimbursement rate pressure “has developed into a larger than anticipated headwind.” At the end of the third quarter, the stock remained the second-largest holding of Greenwich, Connecticut-based Viking Global Investors, the Deerfield, Illinois company’s third-largest shareholder, and the third-largest position of New York-based Jana Partners, which left its stake unchanged. However, Chicago-based Citadel liquidated its entire three-million share position.
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Shares SunEdison closed at $4.56, just above its nearly three-year low. At the end of the third quarter, a slew of investors bailed out of the stock of the Saint Peters, Missouri-based renewable-energy company, including New York-based Third Point, New York-based Millennium Management and Chicago-based Balyasny Asset Management.
