Juniper Networks announced a compromise deal with activist investment firm Elliott Management Corp. The networking company said it appointed two new independent directors to its board, effective March 1. In a statement, Juniper said the two individuals were identified through a search process initiated last year by a board committee, “which included an evaluation of candidates recommended by Elliott.” At year-end, the New York hedge fund firm founded by Paul Singer was the largest investor in Juniper, with more than 9 percent of the shares. The stock rose 1.33 percent on the news, to close at $24.45.
Separately, Elliott bought another 5,000 shares of Informatica Corporation after exercising call options, boosting its economic interest to 9.4 percent of the shares outstanding. In late January we reported that Elliott disclosed a new activist position in the provider of enterprise data integration software. We noted at the time the hedge fund was not specific about any plans in its regulatory filing but that Bloomberg reported Elliott may call on the company to seek a buyer, preferably a private equity firm or another tech company, citing an unnamed source. The stock closed at $41.04. The latest shares were bought on February 18 after exercising call options. The stock closed at $43.55.
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There are now 165 hedge fund activist firms globally managing a total of $120 billion, according to a new comprehensive report published by the Alternative Investment Management Association, a global hedge fund trade association. The study — which is really a digest of many previously published studies, reports and data — also claims activists are in their investments for the long haul. It states the average holding period for activists is two years.
And how have investors fared? Well, the average activist fund rose a total of 50 percent during the most recent three-year period, according to the report, citing performance data from Chicago-based industry tracker Hedge Fund Research.
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Barry Rosenstein’s Jana Partners disclosed a new activist investment in Computer Sciences. Since the beginning of January, the New York hedge fund firm nearly tripled its stake in the information technology services company, to 8.37 million shares — including options to purchase nearly 3.8 million shares — or 5.9 percent of the total outstanding. In an initial 13D filing, Jana said it has held discussions with management and the board of directors regarding potential strategic alternatives and the company’s capitalization and capital allocation.
Jana also said in the filing that it may discuss board composition and may take other steps to boost the stock’s value, including acquiring a control stake, forming a group with any other entities, “engaging in an extraordinary transaction,” such as a merger, or “acquiring a material amount” of the company’s assets.
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UBS raised its price target on Valeant Pharmaceuticals International to $222 from $165 following the drug maker’s announcement that it is acquiring Salix Pharmaceuticals. “While we wouldn’t be surprised if the stock takes a breather in the near term, we are comfortable raising our numbers and PT (price target) and still believe there is more to go as management executes on recent deals and its business model,” the investment bank states in a note to clients.
