This content is from: Portfolio

The Morning Brief: Ackman Takes Stake in Air Products; Soros Piles Into Herbalife

It’s official: Pershing Square’s William Ackman has finally revealed the big investment he had been hinting about for over the past month. The activist hedge fund manager, who these days likes to make publicly choreographed disclosures for his high-profile investments, has taken a 9.8 percent stake in Air Products and Chemicals. The stake is worth about $2.2 billion, making it his biggest single investment ever. Efforts to buy more than 10 percent were thwarted last week when the company instituted a poison pill making it prohibitively expensive for the activist hedge fund manager to exceed that threshold. Investors and others have been speculating about Ackman’s big investment ever since published reports disclosed the manager was trying to raise money for a fund that would invest in just one stock. Keep in mind that Air Products also has a staggered board of directors, which makes it harder for an activist to take control of the board in a single year.

---


Talk about piling on. George Soros has bought a big chunk of Herbalife stock, according to CNBC. In fact, Herbalife is one of his top three holdings, sources told the network. There is no regulatory filing to confirm this. Meanwhile, hedge fund manager Robert Chapman of Chapman Capital also disclosed Wednesday that he has had an investment in the nutrition supplements company and even boldly predicted the stock would eventually rise to $300. Well, that’s one way to get on TV and into a hedge fund blog. For his part, Pershing Square’s Ackman told CNBC Wednesday he has not covered a single share of his disastrous short of Herbalife. The stock climbed another 9 percent on Wednesday, to close at $65.51.

---

Meanwhile, shares of J.C. Penney, a major long position of Pershing Square’s Ackman, slumped more than 10 percent in the final hour of trading after a New York Post report said CIT, a commercial lender and “factor” in the apparel industry, stopped financing deliveries from smaller suppliers to Penney stores.


---

The special committee of Dell’s board rejected Michael Dell’s proposal to change the voting rules which, in effect, would make it easier for him and Silver Lake Partners to receive the required number of votes to gain approval for their offer to take the company private. As a condition of their proposal, Dell and the private equity firm offered to increase their proposed buyout price to $13.75 from $13.65 per share. “The committee is not prepared to accept your proposal,” it stated in its letter to Dell. However, it said it would establish a new record date for a vote on a $13.75 per share transaction. “A new record date would enable the many shareholders who bought their shares after June 3, 2013 to vote on the transaction while giving all shareholders more time to reflect on where their best interests lie in light of the improved offer,” the committee stated. It said it would hold a vote on the existing $13.65 per share transaction at its special meeting on August 2.

---

Goldman Sachs chief operating officer Gary Cohn Wednesday said on CNBC that SAC Capital Advisors is still “a great counterparty” and “an important client” to Goldman. “We’re continuing to do business with SAC Capital,” he said. “They’re an important client to us, they have been an important client to us and that’s where we are with them.”

---

Hedge fund BlueMountain Capital Management raised its stake in Lexmark International to 9.2 percent.

---

John Paulson’s Paulson & Co. said it owns 9.2 percent of International Tower Hill Mines., a gold miner. In a little known provision of a fresh 13G filing, the hedge fund said it owned the passive stake as of December 31, 2012.

Related Content