This is shaking up to be a big week for activist hedge funds.
Perhaps the biggest news is that Dan Loeb’s Third Point identified its newest activist target on Monday. The New York hedge fund disclosed that it had accumulated 3.925 million shares of auctioneer icon Sotheby’s, or 5.7 percent of the total outstanding shares. Third Point, which owned 2.5 million shares at the end of June, paid between $40 and $45.76 for its latest purchases, which took place between July 8 and August 23. Loeb has not explicitly stated what his plans or dreams are for the stock, though he did stress that he expects to talk with board members or management, and maybe other shareholders and industry experts as well, to discuss potential changes of strategy and leadership. Predictably, Sotheby’s surged on the news, by 3 percent, to close at $47.20. In the regulatory filing Third Point also said it sold put options referencing 4.131 million shares at an exercise price of $44 and $45 per share, which expire between September 2013 and October 2013. This is going to be fun to watch.
Speaking of watchable, William Ackman’s Pershing Square Capital Management said it will sell its entire stake of J.C. Penney. The activist hedge fund manager, who last week admitted the initial investment in the retailer was a big mistake, said the shares will be sold in a formal registration to be made by J.C. Penney. Citicorp is the sole bookrunner in the transaction. Ackman recently resigned from the embattled retailer’s board of directors. The stock dropped to about $13 in aftermarket trading Monday.
And Jeffrey Ubben’s ValueAct reported it bought another 1.2 million shares of MSCI for between $37.32 and $37.48 apiece, boosting its stake in the corporate governance research firm to 6.1 percent. The stock, however, is not one of the activist’s core holdings among his 14 stock holdings. MSCI is the parent of RiskMetrics and ISS.