This content is from: Portfolio

The Morning Brief: Meister’s Corvex Puts Pressure on Crown Castle

Keith Meister’s Corvex Management is calling on Crown Castle International Corp. to boost its dividend or increase its leverage ratio and possibly buy back stock.

“Either way, we firmly believe the status quo is unacceptable,” says the New York-based activist investment firm in a letter to shareholders of the operator of communications towers. Meister estimates that if the company adopts his suggestions, the stock could be worth about $100, a 27 percent premium from the price before he made the letter public, and could potentially surge by more than 60 percent in 15 months. The stock rose Tuesday by 3 percent, to close at $80.80.

Meister, formerly Carl Icahn’s right-hand man, manages about $7 billion. He says in the letter that Corvex owns about 12.6 million shares and share equivalents of Crown Castle, for an economic exposure of about $1 billion. Meister says he made his views public in light of reports that Crown Castle is mulling a purchase of Verizon’s towers. “We believe Crown Castle’s valuation can be improved dramatically and sustainably by changing its capital allocation plan, expanding the company’s investor base and closing its discount to peers and intrinsic value,” he states in the letter, noting that he has invested in and followed Crown Castle and its tower competitors since Corvex’s 2011 inception.

___

Starboard Value’s Jeffrey Smith is already shaking things up at Darden Restaurants. The New York-based activist investor, whose slate of 12 director nominees was recently voted in by shareholders, was appointed non-executive chairman of the company’s board. At the same time, Clarence Otis resigned as president and chief executive, effective immediately. Darden named chief operating officer Gene Lee as the new CEO. The board also named new board committee chairs, including Smith as head of the search committee.

___

Keefe, Bruyette & Woods lowered its earnings estimates for Och-Ziff Capital Management, the publicly traded, New York-based hedge fund firm headed by Daniel Och. It also trimmed its price target from $15 to $14. The brokerage firm said it lowered its estimates for the third quarter and all of 2014 “to better reflect hedge fund returns during the quarter.” It reduced its estimates for 2015 and 2016 “to reflect lower AUM than previously forecast.” However, KBW maintained its Outperform rating on the stock.

___

KBW also lowered its 2014 estimates for Fortress Investment Group “to better reflect asset returns and hedge fund returns during the quarter.”

___

Steven Cohen’s Stamford, Connecticut-based family office Point72 Asset Management disclosed that it owns 5.2 percent of Aegerion Pharmaceuticals, Inc., a biopharmaceutical company that specializes in developing therapies for patients with debilitating rare diseases.

___

O. Andreas Halvorsen’s Viking Global Investors said in a filing that it established a 1.75 million share position in online home-goods retailer Wayfair, Inc., or 12.6 percent of the total outstanding. The Greenwich, Connecticut-based Tiger Cub did not own any shares of the company at the end of the second quarter.

___

Kenneth Griffin’s Chicago-based Citadel announced in a filing that it owns 5.4 percent of Starwood Waypoint Residential Trust, which manages single-family homes.

___

Chicago-based Balyasny Asset Management disclosed that it owns 5.2 percent of Churchill Downs, Inc., the parent company of the legendary racetrack Churchill Downs.

Related Content