Three major hedge funds are leading a group of junior debtholders who plan to sue Caesars Entertainment, which they claim is trying to avoid making its debt payments. Appaloosa Management, led by David Tepper, who topped Alpha’s Rich List for the second straight year after earning $3.5 billion in 2013, is one of the funds. Canyon Capital and Oaktree Capital Management are also spearheading the effort to prevent Caesars from selling four of its casinos to another Caesars-owned entity for $2.2 billion and using the proceeds to reduce its nearly $20 billion in debt, according to the New York Post . The hedge funds claim the casino operator, which is in the red, must use the proceeds from the sale to pay creditors, arguing that since it is nearly bankrupt this is an illegal transfer of assets. Caesars reportedly argues it can use some proceeds to reduce debt. “Many [creditors] have positions, evidenced by $27 billion in outstanding credit default swaps, which motivate them to bet against its future success,” a Caesars spokesman told the Post.
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Kenneth Griffin’s Citadel Advisors has disclosed a 7.2 percent passive stake in the retailer Burlington Stores.
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Taconic Capital Advisors disclosed a 5.9 percent passive stake in WPX Energy, a company engaged in the production of natural gas, natural gas liquids and oil.
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Credit Suisse raised its rating on Monzelez International to Outperform from Neutral and hiked its target price to $42 per share from $35 following the company’s sale of its coffee business to a joint venture that will be known as Jacobs Douwe Egberts and run by JAB Holding Co. The investment bank’s analysts called the move “as a master stroke toward creating shareholder value as it generates cash for share repurchase while maintaining a stake in a much stronger European entity fully scaled and under the control of a highly respected operator JAB.” Credit Suisse analysts also said in a note to clients Thursday that they are “positively surprised” by the speed at which the company is instituting zero-based budgeting practices “to eliminate the inefficiencies that have caused operations to underperform its peer group for several years.” Not coincidentally, Mondelez is a core holding of aggressive activist hedge fund Trian Partners, led by Nelson Peltz, who ranked number 19 on the Rich List after earning $375 million in 2013.
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Morgan Stanley raised its rating on two high profile Internet stocks. It upgraded Yelp, the online commercial listings and review company to Overweight, noting its current risk/reward offers an attractive entry point. Morgan Stanley’s analysts see 30 percent upside to its $69 price target. “We view positively Yelp’s competitive positioning, consistent execution, and predictable subscription-based revenue stream, which offers investors a high degree of visibility,” says an investor report on Internet stocks that the investment bank released on Thursday. “We also see significant opportunities for Yelp to expand into new revenue products as it seeks to capture a greater share of the offline transactions it enables.”
Morgan Stanley also upped its rating on Twitter to Equal-weight from Underweight, stressing it no longer sees downside to its 12-month fair value estimate. “Although concerns regarding user growth and mainstream adoption remain, we see TWTR as likely to meet investor financial expectations over the next few quarters,” the report tells clients.
