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The Morning Brief: Starboard, Insperity Strike a Deal

Jeffrey Smith's New York-based activist hedge fund firm Starboard Value has reached a compromise agreement with Insperity. Under the deal, Insperity, a provider of human resources services, agreed to appoint two nominees from Starboard — Norman Sorensen and Peter Feld — to its board of directors and will add a third director nominated by Starboard at a later date. The board also agreed to create a new independent advisory committee that will make recommendations to the board regarding capital allocation, expenses and targeted ranges for cash flow margins. Under the deal, Starboard agreed to vote for three incumbent directors, including chairman and chief executive officer Paul Sarvadi, lead independent director Carol Kaufmann, and Austin Young, chairman of the finance and risk management committee.

"As the company's largest shareholder, we recognize the value of Insperity's platform and are pleased to join the board," says Feld in a statement. "We believe the addition of new independent directors will bring a fresh perspective to the boardroom and we look forward to working constructively with the incumbent board members to enhance shareholder value."

In other Starboard-related news, UBS on Monday raised its price target on two stocks with links to the hedge fund firm. UBS raised its rating on Staples to Buy and lifted its price target from $18 to $20, noting that the stock’s 11 percent decline in price so far this year “has created an attractive entry point, with the upside potential far outweighing the downside risk.” The office supplies retailer is trying to merge with rival Office Depot, a deal pushed by Starboard.

The investment bank also lifted its price target on Darden Restaurants from $54 to $65, although it maintained its Neutral rating on the stock. UBS cites the restaurant chain’s recent quarterly report, which revealed that earnings came in above consensus estimates. It notes that restaurant margins have risen due to cost-cuts and that same store sales rose slightly at two of the company’s chains. In October, shareholders elected all 12 Starboard-nominated directors to Darden’s board.

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San Francisco-based Farallon Capital Management disclosed that it bought 30 million shares, or 7.7 percent, of Sky Solar Holdings. It did not own any shares of the Hong Kong-based operator of solar parks at year-end, according to regulatory filings.

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Larry Robbins’ Glenview Capital Management disclosed in a regulatory filing that it owns 6.32 percent of Brookdale Senior Living. In a separate filing, the New York hedge fund firm disclosed that it owns 6.34 percent of The Manitowoc Company, a maker of cranes and other equipment.

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William Ackman’s Pershing Square Capital Management has added some dry powder. The New York-based activist firm reports unloading its entire stake in Allergan after it was acquired by Actavis. Pershing Square received more than $3.4 billion in cash and 0.3683 of a share of Actavis for each of its shares. Pershing Square earlier reported that Allergan was by far its best performing investment in 2014.

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