JANA’s turn of the screw

October 01, 2011  


Is McGraw-Hill’s breakup just what the activist wanted?

By Leah McGrath Goodman

  
  Illustration by Greg Mably
Barry Rosenstein, co-founder of JANA Partners, did not own any stock in the McGraw-Hill Companies at the end of last year. By the end of the first quarter, he’d quietly scooped up more than three million shares. By late June, he was buying at a rate of more than 40,000 shares a day, amassing nearly eight million in total. He persisted throughout July, even as McGraw-Hill’s stock leaped above $43, snapping up another 1.2 million shares. Heading into the last quarter of the year, he secured more than 10 million shares of McGraw-Hill, bearing a price tag of well above $400 million.

Then the news came. McGraw-Hill, in the second week of September, announced it would split in two, creating a market data company and an education and textbook publishing business. It also committed to buying...

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