Did David Tepper just make another epic call? The founder of Short Hills, New Jersey–based Appaloosa Management told Bloomberg on Thursday that the European Central Bank’s surprise interest rate cut was a signal that the long rally in bonds is ending. “Draghi wants inflation in the Euro zone. He will not stop,” Tepper reportedly said. The hedge fund manager, of course, was one of the first investors to call the bottom in the stock market in early 2009 when most others feared we were approaching a near crash. Back in May, he told attendees of the annual Skybridge Alternatives Conference, better known as SALT, in Las Vegas that he was worried that the economy was not growing sufficiently. “I’m not saying go short. I’m just saying don’t be too frickin’ long right now,” he famously counseled.
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William Ackman has chosen Deutsche Bank and UBS to lead the initial public offering of New York–based Pershing Square Capital Management’s Pershing Square Holdings fund, a closed-end fund that will be listed on the London Stock Exchange designed as a potential source of permanent capital, according to Reuters. The activist, whose hedge fund is up more than 31 percent through August, is hoping to raise about $1 billion.
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Another day, another salvo in the war between Starboard Value and Darden Restaurants. On Thursday, Starboard, the New York–based activist hedge fund firm headed by Jeffrey Smith, dismissed the restaurant chain’s earlier announcement that it would include four of Starboard’s nominees as part of a newly revamped board of directors. In a press release Starboard called Darden’s announcement “another poorly conceived and suboptimal solution.”
Starboard added that it is moving ahead with its slate of 12 new director nominees and is launching a proxy fight. In reaction, Darden said Thursday morning Starboard’s proposal would be “significantly destabilizing,” adding, “immediate, wholesale change, as advocated by Starboard, ignores the risks associated with a board that has no direct knowledge of Darden’s current operations and the substantial actions underway to improve performance.”
Elsewhere, Starboard Value sold 300,000 shares of DSP Group, reducing its stake in the wireless chipset maker to 6.1 percent. Back in June 2013, DSP shareholders elected four new board members, two of whom were nominated by Starboard.
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Bank activist hedge fund manager Lawrence Seidman’s Parsippany, New Jersey–based Seidman & Associates has settled with Philadelphia-based Prudential Bancorp and its wholly owned subsidiary, Prudential Savings Bank Prudential Savings Bank, whereby businessman Dennis Pollack would be appointed to the company’s board of directors’ class that expires at the February 2016 annual meeting. Pollack, who was recommended by Seidman, will also be appointed to the board of the bank. The appointment will take place after the completion of the merger of TF Financial Corporation with National Penn Bancshares. Pollack now sits on the board of TF Financial. Interestingly, at one point in his career, Pollack was chief operating officer at John Paulson’s New York–based hedge fund Paulson & Company.
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Citadel disclosed it owns 5.8 percent of Liberty Interactive Corporation. In a separate filing, it said it owns 6.2 percent of Liberty TripAdvisor Holdings, Liberty Interactive’s 57 percent stake in TripAdvisor that was spun off last week. Liberty TripAdvisor now trades as a separate public company from TripAdvisor.
