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The Morning Brief: ValueAct Boosts Baker Hughes Stake
Jeffrey Ubben’s ValueAct Capital Partners bought nearly 10 million shares of oilfield services company Baker Hughes for $53 per share, lifting its stake to 5.3 percent of its total shares outstanding. In a regulatory filing, the San Francisco-based activist firm said it plans to have conversations with management and the board of directors of Baker Hughes to discuss ways to boost the stock’s value. The rest of the filing contains typical boiler-plate activist language without containing any specific plan or recommendation. Last week, regulators blocked Baker Hughes’ planned $26 billion acquisition by Halliburton for the second time. Shares of Baker Hughes jumped about 3.22 percent to close at $45.17, down from their 52-week high of $70.45.
David Tepper continues to turn up the heat on TerraForm Power. The head of Short Hills, New Jersey-based Appaloosa Management fired off a letter to the Maryland Heights, Missouri-based subsidiary of SunEdison demanding to inspect its books and records so it could “investigate breaches” of Delaware law and fiduciary duties by the board of directors and certain officers. Appaloosa owns 9.5 percent of the shares.
Earlier this month, Appaloosa questioned TerraForm CEO Brian Wuebbels’ plans to acquire the Vivint Solar portfolio of residential rooftop assets. In an earlier letter, Tepper also called into question the arm’s length relationship between SunEdison and TerraForm, a SunEdison subsidiary that holds a portfolio of wind and solar assets.
Among a long list of requests in the latest letter and filing, Appaloosa says it wants all records related to the company’s decision to enter into the arrangement with SunEdison and its subsidiaries for the sale of residential solar systems. This includes any analysis conducted by the board or its corporate governance and conflicts committee.
Shares of TerraForm Power fell about 0.50 percent on the news, to $12.39. Shares of SunEdison, which had been surging of late, plunged more than 21 percent, to close at $5.31 on more than three times the average daily volume. The stock had previously risen 140 percent since it hit bottom on November 20, so some of the selling could be from bottom-fishers taking profits to lock in a quick huge gain.
San Francisco-based Farallon Capital Management disclosed it exceeded a 5 percent ownership stake in SolarWinds on December 11 and then several days later sold some shares, putting it slightly below the 5 percent threshold. Still, it owns 4.96 percent of the maker of enterprise information technology infrastructure management software.