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The Morning Brief: Ackman Catches a Break with Air Products

William Ackman finally scores a much-needed win for his New York hedge fund firm Pershing Square Capital Management. Air Products, his newest activist target, Thursday announced that it will add three new independent directors to its board and look for a new chairman and CEO to replace John McGlade, who will retire in 2014. Pershing Square said in a regulatory filing that it would vote for all of the company’s director nominees at its upcoming annual meeting. Interestingly, Ackman is quoted in the company’s press release, stating: “In recent weeks, we have been delighted to get to know John and the rest of the board working with them on their mission of continuous improvement and long-term shareholder value creation.” Spoken like a true activist. Hopefully, he won’t tell the board he knows someone at Apple who would make a good CEO. Shares of Air Products rose 2.34 percent Thursday, to close at $109.83.

It’s down, it’s up, it’s down. Shares of J.C. Penney traded in the extraordinarily wide range of $9.53 to $11.21 on Thursday, closing at $10.42, up nearly 3 percent for the day. Its shares swung on reports that ranged from euphoria that the embattled retailer reiterated previous rosy forecasts to other reports that it may need to raise capital. Sure enough, after the market closed, the company filed to sell nearly $1 billion in new shares. The news led investors to knock down the price of the stock about 5 percent in after hours trading.

Deutsche Bank initiated coverage of Safeway with a Buy and a $37 target price despite what it calls the supermarket company’s “dismal” return on invested capital. The company is the latest target of activist Jana Partners, the New York hedge fund firm headed by Barry Rosenstein. In a brief note to clients, Deutsche Bank says it is anticipating an “aggressive repurchase” of shares, beginning next fiscal year. “We see significant opportunities to create value by rationalizing assets,” it adds in the report, which conspicuously does not mention Jana.

Silver Point Capital disclosed that it owns more than 1.7 million shares of K-V Pharmaceutical, which last week emerged from bankruptcy. The Greenwich, Connecticut hedge fund, headed by Edward A. Mulé and Robert J. O’Shea, was the senior bondholder of the company, which specializes in women’s healthcare. Under the reorganization plan, investors led by Capital Ventures International, Greywolf Capital, Kingdon Capital and Deutsche Bank, along with Silver Point Finance, provided the majority of the funding for the company’s new $100 million credit facility and $275 million rights offering and direct purchase of new common shares.

James Simons, founder of East Setauket, New York hedge fund giant Renaissance Technologies, and his wife, economist Marilyn Simons, were awarded the Carnegie Medal of Philanthropy, which recognizes those who use their private wealth for the public good, according to the Carnegie UK Trust. The former chairman of the Stony Brook University mathematics department and founder of Math for America, Simons aims to improve education in math and science, in part through his Simons Foundation. In fact, nearly two years ago, his Simons Foundation announced a $50 million grant to fund endowed professorships and graduate fellowships in Stony Brook’s math department, while Simons and his wife personally donated $100 million to the university. Simons is also a big supporter of autism research.

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