Two of Elliott Management Corp.’s activist
stocks surged Wednesday after the hedge fund firm received some
good news on the two targets.
Cognizant Technology Solutions Corp. announced a cooperation
agreement with the multistrategy firm that is perhaps best
known for its activist investing. Cognizant, an IT consulting
and services firm, agreed to name three new directors to its
board, two at this year’s annual meeting and one
at 2018’s meeting. Three existing board members
will not stand for reelection. Under the agreement,
Elliott has also agreed to certain customary standstill
provisions. Late last November Elliott announced a new position
in Cognizant. Shares of Cognizant jumped about 5 percent, to
close at $56.45.
Separately, First Pacific Advisors reportedly said it plans
to support Elliott in its proxy fight with Arconic, the
aerospace and automotive-parts maker. In late January Elliott
bought about three million shares of Arconic, boosting its
stake in the Alcoa spinoff from 9.6 percent to 10.3 percent.
Elliott also said it would nominate five directors to the board
and urged CEO Klaus Kleinfeld to be replaced. In the past week,
Elliott has stirred up controversy after filing two different
estimates for valuing Arconic. Its latest revision reduced its
estimate for its value of the stock to $46 from as high as $54.
In a February 7 press release, Arconic asserted that Elliott
posted "no fewer than five versions of its shareholder
presentations — each with significantly restated
calculations, industry data sources and valuation analyses
— during the first week of Elliott’s
campaign to change management at Arconic."
It added that just two of these presentations have been
filed with regulators. "Arconic believes that the rapid
succession of revised analyses calls into question
Elliott’s grasp of Arconic’s business
and industry, and whether Elliott truly understood Arconic and
its opportunities prior to launching its proxy fight," the
company said in a statement. Shares of Arconic surged 2.55
percent, to close at $27.30.
Starboard Value’s Jeffrey Smith is one of
three individuals who will be joining the board of directors of
Perrigo Company in a deal between the activist hedge fund and
the Ireland-based drugmaker. Under the deal, Starboard, which
owns 6.7 percent of the shares, will also get to recommend two
additional independent directors to be added to the Perrigo
board. Four current directors are also stepping down from the
board, effective immediately. Another board member will resign
after the appointment of the second additional director
recommended by Starboard at a later date. In mid-September,
Starboard disclosed a 4.6 percent position and called on the
company to make changes to "reverse the trajectory of poor
operating and financial performance." Shares of Perrigo rose
slightly to close at $77.93.
Keri Findley, a partner at Dan Loeb’s
Third Point, left the multistrategy firm last week,
businessinsider.com, citing people familiar with the
matter. She was one of four partners at the firm, which manages
about $15 billion. She had been with Third Point since 2009,
initially working as an analyst in structured credit.
January was no doubt a good month for most hedge fund
strategies. And one firm that fared better than most was
Bienville Capital Management, which manages several niche
strategies. For example, its $325 million Bienville Argentina
Opportunities Fund surged 14.7 percent last month. The fund,
which invests in Argentine real estate; public securities
including financial services, energy, homebuilders and other
sectors; and private equity, is up 58.6 percent since its July
2014 launch. January’s big gains were driven by
banks and agriculture as well as investments in energy after
president Mauricio Macri announced the elimination of a
15-year-old export duty on oil and oil products.
The Bienville Brazil Opportunities Fund, which invests in
Brazilian equities — mostly mid-sized companies
— rose 9 percent in January and is up 12.9 percent
since its August 2016 inception.
Bienville, which manages $1.2 billion, was launched in 2008
by Cullen Thompson, Billy Stimpson, and Ralph Reynolds.
Buffalo Wild Wings surged 5 percent or so, to close at
$7.60, even though several investment banks cut their price
targets after the specialty dining chain sharply missed
fourth-quarter earnings estimates. UBS, for example, pared its
target from $180 to $170 but retained its buy rating on the
stock while Credit Suisse slashed the price target from $165 to
$150 and maintained its neutral rating.
In a note to clients, Credit Suisse says the company "still
has a long ways to go to regain stability and visibility." It
also fears that 2017 guidance "could prove optimistic amidst a
backdrop of rising labor costs, elevated wing costs, intense
competition, and limited pricing power."
Earlier this week and before the company reported its
financial results, activist hedge fund firm Marcato Capital
Management nominated four people to the board of Buffalo Wild
Wings, including Mick McGuire III, who heads up the San