Activists Jana, Elliott Each Gain 40% on PetSmart and Riverbed
By Beth Jinks
Dec 15, 2014 4:49 PM ET
Activist investors Jana Partners and Elliott Management each made at
least 40 percent on bets that targeted companies would appeal to
private-equity buyers -- in one busy weekend.
Jana will pocket about $230 million in profits from its investment in
PetSmart Inc. (PETM),
which agreed to a buyout led by BC Partners less than six months after
Jana pushed it to find a buyer. Elliott’s profit will be about $110
Riverbed Technology Inc. (RVBD)’s
sale to Thoma Bravo and pension investment group Teachers’ Private
Capital is completed.
In a year where booming strategic transactions have kept corporate
lawyers and investment bankers busy, many of the deals -- including
spinoffs, buybacks, inversions and asset sales -- came with an
activist shareholder publicly or privately pressuring change, or the
fear of one lurking.
PetSmart’s $8.3 billion buyout is the biggest leveraged deal for an
American company this year. Riverbed agreed to sell itself for about
$3.6 billion almost a year after Elliott first agitated for an auction
and bought its shares.
Other targeted companies also capitulated to some activist demands
before the holidays. Allison Transmission Holdings Inc. agreed to
allow activist ValueAct Capital Management’s partner Gregory Spivy to
join its board in the future in a standstill deal with its biggest
shareholder, according to a statement today. Separately today,
Armstrong World Industries Inc. added Spivy to its board in another
deal with ValueAct, its second-largest shareholder.
Activist Sandell Asset Management Corp. welcomed the announcement that
Bob Evans Farms Inc. Chief Executive Officer Steve Davis is stepping
down. The board -- which includes four Sandell nominees following a
proxy fight earlier this year -- is searching for a replacement, the
restaurant and food-processing company said today in a statement.
Not all activist campaigns look as likely to be profitable.
Talisman Energy Inc. (TLM),
which was trading at about C$13 a share when
Carl Icahn disclosed a
stake in October 2013, is nearing a sale to Repsol SA for C$6 to C$8 a
share, people familiar with the matter have said. The stock dropped
below C$5 this year for the first time since 2000 after a plunge in
crude oil prices, which fell to a five-year low last week.
While Talisman also may get a potential rival bid from Canada Pension
Plan Investment Board, people with knowledge of the matter have said,
it’s not likely to help Icahn, the company’s second-largest
shareholder with two board seats, recoup his money let alone make a
Funds managed by activists jumped by almost $19 billion this year
through Sept. 30 to $112.07 billion, after almost tripling during the
previous five years, data from Chicago-based Hedge Fund Research Inc.
show. Activists targeted 371 companies this year through Dec. 11,
according to data compiled by Hedge Fund Solutions LLC. That’s a 13
percent jump from the same period last year.
Activist investors buy sizable stakes in publicly traded companies and
agitate for management and directors to increase shareholder returns.
Once they buy more than 5 percent of a company’s stock, they’re
required to flag their intention to actively engage management and the
board by disclosing their holding in a 13D filing with the U.S.
Securities and Exchange Commission.
To contact the reporter on this story: Beth Jinks in
New York at
To contact the editors responsible for this story: Mohammed Hadi at
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