Shareholder Activists Week in Review: Winners and Losers

With proxy season in full throttle this past week, many of the most heated shareholder activist battles experienced major developments. The biggest activist hedge fund winners of the week were Steel Partners, Carl Icahn and Eastbourne Capital Management, while the biggest losers were Bill Ackman of Pershing Square and Millbrook Capital. Below is recap for all the biggest developments of last week.

Biggest Winners:

Aderans Holdings (8170.T) – For the second year in a row, shareholders of the Japanese wig maker voted in favor of Steel Partner’s activist agenda. Shareholders elected all of the activist fund’s nominees to board of directors, effectively ending Unison Capital’s attempt to purchase a 35% stake in the company.

Amylin Pharmaceuticals (AMLN) – On Wednesday, shareholder activists Carl Icahn and Eastbourne Capital Management celebrated as it was announced that two out of their five board nominees had successfully won seats on for Amylin’s board. Besides not winning all five seats, the activists also did not get enough votes to reincorporate the company in North Dakota from Delaware. Amlyn’s stock gained 21 cents or 1.89% over the week, closing at $11.32 on Friday.

Undecided:

Biogen Idec Inc (BIIB) – Biogen Idec announced in a press release that both Proxy Governance Inc. and Glass, Lewis & Co. were supporting the company’s slate of directors. On the other side, Carl Icahn’s activist slate received support from RiskMetrics Group, which recommended that shareholders vote for two of the hedge fund manager’s four nominees. The winners will be decided on Wednesday June 3^rd at the company’s annual shareholder meeting. Biogen’s stock gained $1.40 or 2.78% over the week, closing at $51.79 on Friday.

Biggest Losers:

Target Corporation (TGT) – Bill Ackman’s long standing activist battle against Target Corp suffered a devastating loss on Thursday when Target announced that all four of Pershing Square’s nominees had been handily defeated. Target&... stock fell by $1.44 or 3.53% over the week, closing at $39.30 on Friday.

Chemed Corporation (CHE) – Millbrook Capital, also know as MMI Investments, withdrew its activist slate of nominees after several influential proxy advisory firms gave the company’s slate of nominees their full support. Millbrook may not be gaining board representation, but at least the value of their CHE holdings increased. Chemed’s stock gained $1.09 or 2.93% over the week, closing at $38.27 on Friday.

For complete Shareholder Activist Profiles, please see:

• Eastbourne Capital Management
• Icahn Associates
• Millbrook Capital (MMI)
• Pershing Square Capital Management
• Steel Partners

Disclosure: No positions

Comments

[pitboss33704:]

Ackman is living proof that it is still possible today for 1 of the " smartest guys in the room " to throw good money after bad at a clearly losing proposition ...

Jun 01 11:22 AM

[Thomas Nojes:]

There is another reason to be excited about Aderans: It may be winning the race to develop a practical hair-cloning technology!

If it does, it could open up a multi-billion-dollar market virtually overnight. See..

stemcellbaldnesscures..../

Jun 01 12:42 PM

[HardwoodFlo...:]

Target: just don't see how it's a loser here. The stock is up from $25 to $40 in what has been the most challenging retail enviroment since the depression. Sure Ackman owned like 3%, whcih he is probably selling to help get back the nickles left on the dollar to the poor dumb bastards that entrusted him with $2bln before he lost 95% of it....

Judging by the 5000+ word letter to the NYT the guy, Ackman, seems off the rails to me…Bonfire of the vanities indeed! In one fall swoop he has torched his reputation- good riddance. He is the personification of “hedge fund” manager gone awry. The idea that he was able to raised $2bln on this quixotic adventure is absurd. The fact that he burnt 90% of the investment is apropos to the hubris he displayed and the willingness to become absolutely morally bankrupt as he shifted his “cause celebre” from one point to the next with no seeming financial mission at all. The hubris is just stunning and reflects the dumb money that was sloshing around just a few years ago to these guys who with little vision and no insight, just a bunch of faulty financial engineering as model, no real life experience running a company thought they could do a better job sitting in a ivory tower looking out over Central Park. What a jerk.

Ackman wanted to push a “reach around” (aka Sale Lease Back) on the real estate for what purpose? No doubt so that some dubious REIT could benefit from what Target already owns. While a Reach Around can be good for a company to get some quick cash it isn’t good for the long term health of the company. It works well with private firms, where the Reach Around benefits the owner, but under this scenario the operating company would be obligated to some unknown entity not necessarily the current shareholders of Target.

Ackman’s whole thing already was getting annoying. Business is not some theory that some geek like Ackman derives from B-School. Target is an amazing company, that was created with a clear vision and operating platform. All Ackman is doing is clouding that vision and trying to pervert it to his own particular ends- not for the benefit of the company.

An activist shareholder should be out for the long term goals and vision of the company if he is not be an activist in another company. The business of Target is just that- the business of Target. This whole thing reminds me of the Private Equity guys who think they can run public companies better than the public companies themselves. The Hubris is staggering…put that pimpled faced Ackman in his place…Just because some jerk can raise a fund he thinks he can manage a business as big, diverse and unique as Target is insane. Flush him down the toilet, back to NYC…

Let’s see this clown try and do something that adds true value to the world like start a business, manage it, create jobs and opportunities, expand that business and create some value. All he has done in his in this episode is diminish his investors value and distract a good company from it’s day-to-day oeprations. What a loser.

Just another thought. It is fitting that Ackman was featured in the last issue of Portfolio (although I personally like the magazine) as his profile was truly obnoxious. What about that stupid story of his and his first business “deal” which was out witting his roommate on the bigger room? The fact that this d-ckweed is entrusted with billions is, in my opinion, INSANE.

Jun 02 04:21 PM