CSX Corp., the railroad company in which Paul
Hilal’s Mantle Ridge has an activist stake,
announced Saturday, December 16 that its chief executive
officer and president Hunter Harrison died "due to unexpectedly
severe complications from a recent illness."
His death in Wellington, Florida follows the
company’s December 14 announcement that Harrison,
73, was on
medical leave because of the complications, and that Chief
Operating Officer James Foote would act as CEO. CXS shares
dropped 7.6 percent to $52.93 on Friday, December 15.
"With the passing of Hunter Harrison, CSX has suffered a
major loss," Chairman Edward Kelly said in
Hilal, a former partner at Bill Ackman’s
Pershing Square Capital Management, created
Mantle Ridge last year to invest solely in CSX. He aimed to
repeat his success at Canadian Pacific Railway, where Pershing
Square won a proxy battle and installed Harrison, eventually
reaping a more than 300 percent gain on its stake.
"Professionally, Hunter was unmatched in this industry,"
Canadian Pacific President and CEO Keith Creel said in a
statement. "He will go down as the best railroader ever,
plain and simple."
Hilal had pressed CSX to hire Harrison, which the
Jacksonville, Florida-based company agreed to do in March.
Several Mantle Ridge nominees, including Hilal, were added to
the railway’s board.
"Hunter was a larger-than-life figure who brought his
remarkable passion, experience and energy in railroading to
CSX," the transportation company said.
More than four years after Paul Singer’s
Elliott Management gained board seats at Hess Corp., the
activist firm is ratcheting up demands on the oil and gas
Elliott wants to push out Chief Executive Officer John Hess,
or possibly sell all or part of the company, according to
The Wall Street Journal on December 14. "As long-term
shareholders in Hess, we are frustrated by the
company’s continuing underperformance," John Pike,
senior portfolio manager at Elliott said in a statement to the
newspaper. "Shareholders are getting impatient, because the
changes needed to remedy Hess’s severe
undervaluation are substantial and need to be announced without
delay." A person familiar with the matter confirmed The
Wall Street Journal’s report.
News that Elliott wants to remove the CEO sent Hess shares
up 1.7 percent on December 15 to close at $43.40, though
they’re still down about 30 percent for the year.
The hedge fund’s struggle to turn Hess into a
winner is a mar on its otherwise stellar reputation as an
activist. Hess was trading around $68 a share when Elliott
announced a 4.85 percent stake in the company in January
The firm has since increased its ownership to 6.7 percent of
Hess, its third-largest position, worth just under $1 billion
on September 30, according to a quarterly filing with the
Securities and Exchange Commission.
John Griffin’s Blue Ridge Capital, one of the
original "Tiger cub" hedge funds, is
closing its doors after more than two decades, according to
Bloomberg. Griffin told investors in a December 15 letter that
he’s shutting the $6 billion firm, Bloomberg
reported. Griffin began his hedge fund career working for
Julian Robertson’s Tiger Management before leaving
to start Blue Ridge in 1996.
The once-$40 billion London hedge fund firm Brevan Howard
Asset Management was down to $10 billion at the end of October,
and investors will withdraw at least another $1 billion at the
end of this month, according to a December 15 Bloomberg
report. Brevan Howard, a macro fund, is facing "a record
annual loss" in 2017, Bloomberg said, citing an unnamed person
with knowledge of the matter. The firm doesn’t
plan to return capital to clients or covert the hedge fund into
a family office, Anthony Payne, a spokesman for Brevan Howard
Bill Ackman and his Pershing Square Capital
Management’s beleaguered Herbalife short bet just
got some help from a group of Italian lawmakers, according to a
report December 15. Six Italian senators have asked their
government to investigate Herbalife, likening its marketing
operations to a pyramid scheme, according to the news report.
Bloomberg said the senators cited a report that 84 percent of
its Italian salespeople haven’t made any money.
Herbalife shares fell 4.3 percent on December 15 to close
$67.03. Pershing Square declined to comment. Herbalife did not
immediately respond to a request for comment.