This content is from: Portfolio

The Morning Brief: Icahn, Ackman Trade Sharp Barbs; Compuware Tells Elliott No Dice

Hedge fund mavens square off on TV. The financial world is abuzz over the verbal skirmish, played out live on CNBC Friday afternoon, between Carl Icahn and Pershing Square Capital Management’s William Ackman. The septuagenarian Icahn earlier this week publicly lambasted Ackman for advertising his huge short sale of Herbalife. On Friday he went on at length on the topic on CNBC, without disclosing his market position. When pressed by his interviewer, Icahn told him not to bully him into confirming whether or not he owns the stock. Ackman joined in, telling Icahn he is “free to make a tender offer for the company.” At which point Icahn snapped back: “Hey, you don’t have to tell me what I am free to do.” A brief history: The two were locked in litigation for nearly a decade over a deal involving Hallwood Realty Partners. The courts repeatedly ruled in Ackman’s favor, but Icahn remains adamant the legal document did not reflect their handshake deal. In any case, most of Friday’s exchange dealt with the old feud, with each of them calling the other, in effect, a sleaze ball. Watch it here.

Compuware Corp. blew off Elliott Management’s offer to buy the company for $11 per share, asserting in a statement that the hedge fund “significantly undervalues” the company and is not in the best interest of shareholders. Instead, it announced a series of measures focused on increasing profitability, transitioning to higher-growth businesses and returning capital to shareholders through an annual dividend of $.50 per share, which works out to a yield that exceeds 4.5 percent.

In another blow to an activist hedge fund manager, Canada’s Telus Corp. said it will move forward with its plan to combine two classes of stock after New York-based Mason Capital Management agreed to drop all claims. Mason claimed the exchange offer is bad for shareholders of the voting stock. Mason recently reduced its stake in the voting shares from 19 percent to just 3.4 percent.

Hedge funds are eager to sell short shares of Peugeot. Reuters says the stock of the French car-maker is currently one of the most in-demand stocks in Europe for short-selling by hedge funds. Short-sellers include Marshall Wace, Odey Asset Management, Egerton Capital and D.E. Shaw.

Ken Griffin’s Citadel reported that it owns nearly 4.8 million shares of Express Inc., or 5.6 percent of the total outstanding shares of the specialty retailer. This is more than triple its stake at the end of the third quarter.

Shares of Apple dropped another 2.36 percent, to close the week at $439.88. Ouch!

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