Jeffrey Smith’s New York–based investment firm Starboard Value has hired Charles Sonsteby as a consultant for its activist battle with Darden Restaurants. Under their arrangement, Starboard will pay Sonsteby a $50,000 fee, which he in turn agreed to use to buy shares of the stock of the restaurant company. According to a regulatory filing, Sonsteby bought 500 shares of Darden.
Sonsteby is the chief financial officer and chief administrative officer of The Michaels Companies and Michaels Stores, the arts and crafts retail chain. He previously served as chief financial officer and executive vice president of Brinker International, which owns the Chili’s Grill & Bar and Maggiano’s Little Italy restaurant chains.
In a regulatory filing, Starboard cites Sonsteby’s “unique skill set, broad restaurant industry experience and extensive restaurant industry knowledge.” Starboard, which has previously made it very clear it opposes the restaurant company’s plans to spin off the Red Lobster unit, reportedly plans to launch a consent solicitation. It is calling for a special meeting that would have shareholders vote on a nonbinding resolution that would in effect tell Darden’s management not to move ahead with the spinoff.
— Shares of SouFun Holdings Ltd. surged more than 6 percent Tuesday after Stephen Mandel Jr.’s Greenwich, Connecticut–based Lone Pine Capital disclosed that it owns a 6.4 percent stake in the Chinese real estate website.
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Shares of hedge fund favorite Vipshop Holdings jumped 32.44 percent after the Chinese online discount retailer late Monday reported earnings that were exponentially higher than Wall Street had forecast, subsequently leading analysts to raise their price targets. Its largest shareholder is John Burbank’s San Francisco–based Passport Capital. Other major holders include Tiger Cubs Tiger Global Management, Miura Global Management and Joho Capital.
— Shares of J.C. Penney continued their miraculous turnaround, climbing another 4.15 percent, to $8.29. It has risen for six straight days, for a total gain of more than 58 percent. There must be some serious short covering going on there.
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The Credit Suisse LAB Index was up 1.49 percent in February, according to Dr. Jordan Drachman, head of alternative beta strategies at Credit Suisse. The Index tries to reflect the performance of the overall hedge fund industry. The event driven strategy led the way last month, posting a 2.29 percent gain. It is also the top performer for the year so far, up 2.47 percent.
