Connoisseur of the untold stories on Wall Street, skewed toward activist hedge funds

Big 5 Sporting Goods ($BGFV): Activist Investor Stadium Capital Is Fed Up

Added on by Gordon Gekko .
Alex Seaver (left), Stadium Capital founder

Alex Seaver (left), Stadium Capital founder

Stadium Capital went active (filed a 13D) on Big 5 Sporting Goods ($BGFV) back in August of 2011, taking issue with board composition. BGFV game Stadium a board seat just a couple months later (in October 2011).

When Stadium first started its activist campaign, it owned 15% of the company. It now owns just 11.3%. Yet, Stadium is still BGFV's largest outside shareholder and it's still trying to get BGFV to improve its corporate governance.

This comes as Stadium Capital has been relatively quiet over the last few years when it comes to BGFV. But in December, Stadium Capital submitted a shareholder proposal to declassify the board. This included eliminating a supermajority election requirement and changing the staggered board in favor of annual board member re-elections. All this was in an effort to fix BGFV's corporate governance issues. Read the full piece here.

Shares of $BGFV are down 30% on the yeaar.

Shares of $BGFV are down 30% on the yeaar.


Gannett ($GCI): Icahn, The Spin-Off Good Enough

Added on by Gordon Gekko .
icahn.jpg

If Gannett Co. ($GCI) thought a spinoff would be enough to appease Carl Icahn, they just received a rude awakening. "I am concerned about decisions the Gannett board may make now in anticipation of the spin-off that could prevent stockholders of both companies from realizing the highest value for their shares," Icahn wrote in a letter (per a 13D/A filing) to the CEO announcing his intention to seek two seats on the board of directors.

In particular, Icahn believes that either of the two companies formed via the spinoff could be an attractive acquisition target. He wants to ensure that management and the board cannot take actions to prevent shareholders from voting on an acquisition offer. As such, he also plans to propose several measures at the annual shareholders meeting to keep the company from hiding any acquisition offers. Read the full piece here.

$GCI ranks 15th in Icahn's portfolio 

$GCI ranks 15th in Icahn's portfolio 

Sandell Asset Management Targets SemGroup Corp. ($SEMG)

Added on by Gordon Gekko .
Tom Sandell, Sandell Asset founder

Tom Sandell, Sandell Asset founder

Sandell has its eyes SemGroup ($SEMG), pushing the company for a sale of its business. It has a 1.4% stake in the transportation and storage company. Outlined below is Sandell’s letter to SemGroup. Per the usual, chopped and screwed with emphasis ours.

Sandell has been involved with SEMG since it came out of bankruptcy in ‘09. It recently bought more shares, with the idea that SEMG’s move toward becoming a pureplay GP was a big positive.

But the fund was disappointed by SEMG’s drop-down plans. This means that the true value of SEGM’s shares may never be reflected in its stock price. But the option remains to sale the company, which would get fair value for shareholders.

Sandell’s puts fair value of $104/share in a sale. A sizable premium to its current $68/share price.

Yahoo ($YHOO): Starboard Value, Are You Entertained?

Added on by Gordon Gekko .
Starboard founder - Jeff Smith

Starboard founder - Jeff Smith

Starbarod Value got a big (sort of) win with the Yahoo ($YHOO) announcement that it would be spinning off its Alibaba ($BABA) stake. However, Starboard wanted a spinoff of Yahoo Japan as well. In any case, we look at the rubble that remains of YHOO in a recent column. Recall that Starboard is also pushing for a YHOO and AOL ($AOL) merger. The BABA spin is one step closer to this. 

As noted, Starboard isn't going anywhere. They'll likely push for a spinoff of Yahoo Japan sooner rather than later. It'll also still be touting the benefits of a YHOO-AOL merger. Once BABA is spun off, Yahoo Japan is gone and investors are left with YHOO's core business, I think the market will be much more receptive to a deal with AOL. But we have until 4Q 2015 until BABA is spun off. In the meantime, the key focus should be on building out video - which is still a young and growing market - and is a business that AOL is doing fairly well in.

Read the full piece here

Both YHOO and AOL are in Starboard's top 10

Both YHOO and AOL are in Starboard's top 10

Progressive Waste Solutions ($BIN): Activist Investor Profiting From An Unsexy Business

Added on by Gordon Gekko .
Blue Harbour founder, Clifton Robbins

Blue Harbour founder, Clifton Robbins

But even at 22x forward earnings, Progressive Waste ($BIN) is only at a slight premium to its peers. And its 9.1x forward EV/EBITDA is actually on the low side of the industry. What's more is that BIN now has the highest return on equity (coming in at 11%) among its major peers (RSG, WM, WCN) for the first time ever. That 11% also is nearly double its 10-year median ROE of 6.7%.

stand: Blue Harbour appears to still have confidence in BIN, as the stock remains in its top five. Acquisitions could prove a catalyst for growth in 2015, and if those acquisitions don't materialize, look for the company to ramp up the pace of its stock buyback program. Investors also are getting a modest 1.8% dividend yield. In a fairly expensive overall market, BIN looks like a well-run company in a safe industry that has opportunities for significant upside.

Read the full piece here

$BIN ranks 7th in Blue Harbour's portoflio

$BIN ranks 7th in Blue Harbour's portoflio