Call it a tale of two activist targets. One is going out of its way to cooperate with the activist hedge fund while the other is repeatedly spurning the investor.
On one hand, there is Cliffs Natural Resources, which is the target of an activist campaign being waged by Donald Drapkin’s Casablanca Capital, which owns 5.2 percent of the stock. Casablanca put forth Lourenco Goncalves as a potential candidate to fill the position of chief executive officer of Cliffs. On February 13, Cliffs announced that its board appointed Gary Halverson, former president and COO of the company, as its next president and CEO, effective immediately.
Last week Casablanca said it delivered a letter to the company declaring its intention to nominate a majority of directors for election to Cliffs’ board of directors at the 2014 annual meeting. In response, Cliffs, a mining and natural resources company, issued its own open letter to shareholders, saying the board and management team have attempted to maintain a constructive dialogue with Casablanca. While pointing out “incorrect assumptions and omissions that need to be corrected” in a letter received from Casablanca on January 27, it said nonetheless: “To the extent that Casablanca offers additional ideas that would enhance shareholder value, we stand ready and willing to continue to engage with them on a private basis.” The stock surged about 5.5 percent on Friday.
On the other hand, there is Jos. A. Bank Clothiers, which has repeatedly spurned takeover offers from Men’s Wearhouse. The company announced Friday that it will buy Everest Holdings, the parent company of Eddie Bauer, for $825 million in cash and stock. It also said it will repurchase 16.4 percent of its shares for $65 per share. There was no response from Ricky Sandler’s Eminence Capital, which has been aggressively pushing for a merger between Jos. A. Bank and Men’s Wearhouse. Interestingly, in its press release announcing the acquisition of the Eddie Bauer brand, Jos. A. Bank left open the possibility of still doing a deal with Men’s Wearhouse, noting that Jos. A. Bank will have the right to terminate its agreement to acquire Eddie Bauer if an unsolicited offer is made to acquire Jos. A. Bank that the company deems to be reasonable and would create greater value for its shareholders than the Eddie Bauer transaction and stock buyback.
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Cheyne Capital Management, the $6.5 billion, London–based multistrategy hedge fund firm, announced the launch of a new debt-focused opportunity fund, Cheyne Real Estate Credit Holdings Fund III. According to the firm, CRECH III will “capitalize on the continuing dislocation of the European real estate debt markets and meet the growing demand for real estate finance.” Like CRECH I and CRECH II, CRECH III will invest in mainly U.K. and German real estate across the debt spectrum using a range of instruments, including commercial mortgage-backed securities (CMBS), senior loans, mezzanine loans, equity and special situations workouts. The funds focus on mid-market borrowers, noting that Cheyne is addressing a need for “more comprehensive financing solutions across the capital structure and for varying real estate asset profiles.” Cheyne was founded in 2000 by Morgan Stanley colleagues Jonathan Lourie, who serves as CEO, and Stuart Fiertz, the firm’s president.
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Gary Townsend, a cofounder of Hill-Townsend Capital, formed GBT Capital Management, a new macro long-short hedge fund that will invest in financial firms and other markets, according to Bloomberg. He hopes to raise a modest $100 million over three years. He is a former analyst with Friedman Billings Ramsey & Co. and served as chief examiner of the Federal Home Loan Bank System, according to Bloomberg.
