The Morning Brief: Sandell Cuts Stake in Bob Evans Farms

April 03, 2017   Stephen Taub


The activist manager is reducing its stake in the company following a victory in its campaign.

Fresh off its activist victory, Thomas Sandell’s Sandell Asset Management is starting to reduce its stake in Bob Evans Farms. The hedge fund firm sold nearly 285,000 shares on six different days in the second half of March, conspicuously lowering the stake to 4.9 percent. As a result, it no longer needs to make timely filings when it sells additional shares. The move comes two months after the company agreed to sell its Bob Evans Restaurants business to an affiliate of private equity firm Golden Gate Capital for $565 million, plus assumption of $40 to $50 million in certain net working capital liabilities. The net cash proceeds are expected to be used to repay current debt and to pay a special dividend. Bob Evans is also acquiring Pineland Farms Potato Company. The goal is to concentrate on its BEF Foods distribution business. Sandell had been pushing for this kind of break-up for several years. Shares of Bob Evans are up about 36 percent since the company announced its series of transactions.

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Highbridge Capital Management disclosed it owned 2.28 million shares, or 5.62 percent, of Capitol Acquisition Corp. III as of March 20. The blank check company had gone public in October 2015. On March 20 the parent company of Cision, a cloud-based media company, agreed to a deal with Capitol Acquisition Corp. III whereby Cision will become a public company. The deal is expected to close sometime in the second quarter. This is typically what blank check companies wind up doing. On March 28 Cision announced it acquired Bulletin Intelligence, which has created the daily "White House News Summary" for the executive office of the president that has run since 2001, and also provides custom executive briefings to CEOs and other top executives at major companies.

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Brigade Capital Management said it owned more than 683,000 shares of Ascent Capital Group as of March 20, or 5.7 percent of the residential and commercial security company. At year-end, the hedge fund owned 140,000 shares of the company, as well as convertible notes.

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Shares of hot IPO MuleSoft surged 2.6 percent to close at $24.33. They are now up 43 percent since the enterprise software company went public at $17 per share in March. The stock had closed at $23.80 on its first day of trading. Already Adage Capital Management and Och-Ziff Capital Management each disclosed they picked up more than 5 percent of the shares. However, hedge funds that bought stakes of less than 5 percent are not required to disclose their holdings until May 15.


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