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CATALYST EQUITY RESEARCH REPORT ™ Weekly Research Highlighting Activist Investments Subscribe to receive this FREE Report emailed weekly. www.hedgerelations.com/research.html
Transcript of CATALYST EQUITY RESEARCH REPORT - Hedge fund - Catalyst Equity... · CATALYST EQUITY RESEARCH...
CATALYST EQUITY RESEARCH REPORT ™ Weekly Research Highlighting Activist Investments
Subscribe to receive this FREE Report emailed weekly.
www.hedgerelations.com/research.html
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
HIGHLIGHTING ACTIVIST INVESTMENTS Week Ending April 17, 2015
SYMBOL COMPANY INVESTOR
AEC Associated Estates Realty Land and Buildings DAKP Dakota Plains Holdings Lone Star Value DDXS diaDexus, Inc. Leap Tide DHG Deutsche High Income Bulldog Investors EML The Eastern Company Barington Capital ESSX Essex Rental Corp Casey Capital ICTV ICTV Brands, Inc. Norman Pessin IPAS iPass, Inc. iPass Shareholders for Change ISSI Integrated Silicon Solutions Starboard Value JDSU JDS Uniphase Corporation Sandell Asset Management MAC The Macerich Company Land & Buildings; Orange Capital MYE Myers Industries GAMCO Investors QCOM Qualcomm Incorporated Jana Partners RIVR River Valley Bancorp Thomas Davee ROVI Rovi Corporation Engaged Capital RST Rosetta Stone, Inc. Nierenberg Investment Management SQM Chemical & Mining Co of Chile SailingStone Holdings TPX Tempur Sealy International H Partners TST TheStreet.com Canell Capital WYNN Wynn Resorts Elaine Wynn
HEDGE FUND SOLUTIONS (HFS) provides investment research, strategy and stakeholder communications consulting to companies and investors interested in, or involved with, shareholder activist campaigns. Since 2001 HFS has become the trusted advisor to numerous institutional investors, CEOs and board members worldwide. HFS also administers The Official Activist Investing Blog™, the definitive source for activist shareholder information.
Catalyst Investment Research™ is a portfolio of activist investing research products that combine company-specific shareholder activism research with deep value investment analysis and access to industry insiders.
HEDGE FUND SOLUTIONS’ PORTFOLIO OF ACTIVIST INVESTING RESEARCH INCLUDES: • Daily Email Alerts • Weekly Summary of Activist Investments • Quarterly Buying Analysis of Top 50 Activist Investors • Company-Specific Shareholder Activism Analysis (combining shareholder activism & deep value company analysis) • Special Reports on Activist Investing • 400+ Page Shareholder Activism Report & Regularly Updated Shareholder Activism Resource Portal To Learn More: Download a brochure http://www.hedgerelations.com/CIR/CIR%20Brochure.pdf
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HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Associated Estates Realty (AEC)
Activist Investor: Land and Buildings
Investor Info Catalyst Info Shares 1,671,885 Catalyst:
On April 15 L&B issued a letter calling for a re-balancing of the board in favor of shareholders' interests. http://www.sec.gov/Archives/edgar/data/911635/000090266415002205/p15-1130dfan14a.htm Comment: We initially covered AEC on November 17, 2014 when Land and Buildings announced plans to nominate 7 people to the board. http://www.sec.gov/Archives/edgar/data/911635/000090266414004418/p14-2227exhibit_1.htm On January 28 Land and Buildings held a conference call with 2 of its 7 director nominees to discuss its path to value improvement On January 28 Land and Buildings issued a presentation highlighting opportunities to unlock value at AEC http://www.sec.gov/Archives/edgar/data/911635/000090266415000340/p15-0222dfan14a.htm Land and Buildings sent a letter to the Chair and CEO of AEC commenting on its recent meeting http://www.sec.gov/Archives/edgar/data/911635/000090266415000510/p15-0376dfan14a.htm On February 24 AEC issued a presentation to “set the Record Straight” http://www.sec.gov/Archives/edgar/data/911635/000091163515000049/defa14afeb252015presentation.pdf On February 27 Land and Buildings issued a press release calling for real change and highlighting the potential upside for shareholders under a reconstituted board. http://www.sec.gov/Archives/edgar/data/911635/000090266415001434/p15-0844dfan14a.htm On March 12 Land and Buildings announced it is nominating three candidates to the board. http://www.sec.gov/Archives/edgar/data/911635/000090266415001709/p15-0913exhibit_1.htm On March 13 AEC filed its preliminary proxy materials and set the annual meeting for May 22 http://www.sec.gov/Archives/edgar/data/911635/000119312515090227/d862541dpre14a.htm On April 8 Land and Buildings sent a letter to AEC shareholders highlighting why change is necessary and seeking support for its three director nominees.
Proxy Solicitor to Land and Buildings
Proxy Solicitor to AEC
% Outstanding 2.9% Cost Basis Not Avail Company Info Share Price 24.05 Revenue 195M Market Cap 1.4B Enterprise Value 2.2B Net Cash -745M EBITDA 100M 52 wk. range 16.37 – 26.22 EV/EBITDA 21.8
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Dakota Plains Holdings, Inc. (DAKP) Activist Investor: Lone Star Value
Investor Info Catalyst Info Shares 2,997,000 Catalyst:
Lone Star issued a press release urging DAKP to sell itself and expressed concern about the CEO's plans to acquire assets rather than divest assets. http://www.sec.gov/Archives/edgar/data/1367311/000092189515000939/ex991to3da509482011_04142015.htm Comment: We initially covered DAKP on June 17 when Lone Star disclosed a 5.5% "active" stake On July 22 DAKP increased the size of the board from 6 to 7 and added one rep from Lone Star http://finance.yahoo.com/news/dakota-plains-holdings-inc-appoints-124500377.html On December 15, 2014 Lone Star sent a letter to the board recommending the Company create a MLP structure for the Pioneer Transloading Facility and initiate a strategic alternatives review process in order to create additional value for shareholders. http://www.sec.gov/Archives/edgar/data/1367311/000141588914003880/ex991to13da309482011_121214.pdf
Legal counsel to Lone Star Value
% Outstanding 5.5% Cost Basis 2.15 Company Info Share Price 1.72 Revenue 28M Market Cap 97M Enterprise Value 143M Net Cash -44M EBITDA 8M 52 wk. range 0.95 – 2.86 EV/EBITDA 17.17
diaDexus, Inc. (DDXS) Activist Investor: Leap Tide Capital
Investor Info Catalyst Info Shares 5,225,349 Catalyst:
On April 17, 2015 DDXS agreed to expand the board by one member and add one representative from Leap Tide to the open position. http://www.sec.gov/Archives/edgar/data/1036968/000092189515000979/ex991to13da307617007_041615.htm Comment: We initially covered DDXS on September 5, 2014 when Pessin disclosed a 4.9% "active" stake in DDXS On October 17 Leap Tide disclosed a 7.7% "active" stake On December 15, 2014 Leap Tide Capital increased its ownership from 7.7% to 8.9% and an avg. cost of $0.45/sh On January 7, 2015 three DDXS directors resigned and were replaced by 2 new directors On January 8 Norman Pessin increased his stake in DDXS to 8.9% at $0.57/share On March 2, 2015 Leap Tide nominated two candidates to the board. The following day one candidate withdrew for unknown reasons following a call from the CEO
Legal counsel to Leap Tide Capital
% Outstanding 9.4% Cost Basis 0.45 Company Info Share Price 0.39 Revenue 27M Market Cap 22M Enterprise Value 21M Net Cash 1M EBITDA N/A 52 wk. range 0.28 – 1.15 EV/EBITDA N/A
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The Eastern Company (EML) Activist Investor: Barington Capital
Investor Info Catalyst Info Shares 325,703 Catalyst:
On April 13, Barington filed its definitive proxy statement and delivered a letter to the Company demanding the board repeal recent bylaw amendments, revoke the recent nomination of a board member, and several governance changes, including declassify the board, implement a majority vote standard, adding clawback provisions to compensations plans, disclosing a CEO succession plan, etc... http://finance.yahoo.com/news/barington-group-files-definitive-proxy-141500879.html Comment: We initially covered EML on March 17, 2014 when JAM Capital disclosed a 5.1% "active" stake in EML at an avg. cost of $13.07/share and announced it may present the company with opportunities to increase shareholder value. JAM sold all of its EML shares in April 2014. On September 29, 2014 Barington Capital disclosed a 5.23% "active" stake for $15.55 and announced it has met with EML's CEO and offered to help improve value organically and through acquisition. Barington also suggested two new board members. The board responded saying they have adequate in-house resources and do not intend to change the board at this time. On January 14, 2015 EML rejected a 6.69/share cash + $12.43/share offer from Synalloy On January 17 Minerva (6.0% at an avg. $14.15/sh) announced it is disappointed EML rejected a 6.69/share cash + $12.43 in shares bid from SYNL and believes it should hire an investment bank to examine a sale or substantial changes to its capital structure On February 5 Barington sent a letter to the Chairman/CEO saying they will share plans to: (i) improve Eastern's strategic focus, (ii) accelerate growth and product innovation in high-potential businesses, both organically and through targeted acquisitions, and (iii) improve Eastern’s corporate governance. Barington also announced plans to nominate two individuals to the board. On February 11 we reported that GAMCO had disclosed a 5.9% "active" stake for $16.98/share On February 20 Barington nominated two candidates for election to the board. On March 2 Barington filed its preliminary proxy materials to elect two directors. http://www.sec.gov/Archives/edgar/data/31107/000139843215000083/a12694.htm On March 9, Barington sent a letter to EML rejecting the board’s proposal to increase by two members and add one Barington representative. http://www.sec.gov/Archives/edgar/data/31107/000139843215000089/exh99_5.htm On March 27, Barington sent a letter to EML expressing its disappointment in the board’s decision to expand the size of the board after the annual meeting and appoint a new director, thus avoiding a shareholder vote for that individual. http://www.sec.gov/Archives/edgar/data/31107/000139843215000120/exh99_6.htm
Proxy Solicitor to Barington Capital
% Outstanding 5.23% Cost Basis 15.55 Company Info Share Price 19.66 Revenue 141M Market Cap 123M Enterprise Value 111M Net Cash 11M EBITDA 15M 52 wk. range 15.05 – 20.67 EV/EBITDA 7.4
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Essex Rental Corp (ESSX) Activist Investor: Casey Capital
Investor Info Catalyst Info Shares 1,461,634 Catalyst:
On April 13, Casey issued a press release responding to the Company's announcement to evaluate strategic alternatives for only its crane business, saying the company is likely worth more sold as a whole. http://www.sec.gov/Archives/edgar/data/1373988/000089225115000045/form13d_ex99-8.htm Comment: We initially covered ESSX on February 26 when Casey Capital disclosed a 5.9% "active" stake and sent a letter to the board requesting they examine strategic alternatives and add one representative from Casey to the board. On April 1 Casey Capital nominated three individuals to the board, sent a letter to shareholders outlining why, and submitted a Demand to inspect the company's shareholder list. http://www.sec.gov/Archives/edgar/data/1373988/000089225115000035/form13d_ex99-4.htm
% Outstanding 5.9% Cost Basis 1.26 Company Info Share Price 1.26 Revenue 103M Market Cap 32M Enterprise Value 251M Net Cash -220M EBITDA 16M 52 wk. range 0.64 – 3.30 EV/EBITDA 15.6
ICTV Brands, Inc. (ICTV) Activist Investor: Norman Pessin
Investor Info Catalyst Info Shares 1,7885,459 Catalyst:
On April 13 Norman Pessin disclosed a 7.4% "active" stake in ICTV
Legal counsel to Norman Pessin
% Outstanding 7.4% Cost Basis 0.67 Company Info Share Price 0.64 Revenue 32M Market Cap 16M Enterprise Value 13M Net Cash 1M EBITDA -3M 52 wk. range 0.43 – 0.93 EV/EBITDA Negative
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iPass Inc. (IPAS) Activist Investor: iPass Shareholders for Change (Maguire Asset Management, Francis Capital, Foxhill Capital)
Investor Info Catalyst Info Shares 5,090,221 Catalyst:
On April 15, iPass Shareholders for Change announced a combined 7.7% ownership and nominated 5 candidates to the board citing many attempts over the years for a constructive dialogue that went nowhere, multiple failures to sell the business, management’s continually falling short of executing several different business plans, and ongoing operating losses. https://finance.yahoo.com/news/group-concerned-ipass-inc-shareholders-122700608.html On April 16 iPass Shareholders filed preliminary proxy materials to elect 5 new directors. http://www.sec.gov/Archives/edgar/data/1053374/000092189515000964/prec14a09297004_04162015.htm Comment: We covered IPAS in 2008 and 2009 when Shamrock Capital and then Foxhill Capital demanded board representation. Shamrock was granted one seat in March 2008 but that individual has since resigned. On June 2, 2009 IPAS entered into a settlement agreement with Foxhill Capital. Under the terms of the agreement IPAS said they will (i) declare a $20M dividend, (ii) use reasonable efforts to return an additional $20M to shareholders by the end of 2009, (iii) declassify the board, and (iv) appoint one of Foxhill’s nominees to the board immediately. On January 8, 2010 Millennium Technology Value Partners disclosed it had purchased 5,566,126 shares of IPAS from Shamrock on December 31, 2009. They currently own 6.2M shares, equivalent to 9.9%, at an avg cost of $0.95/sh. Millennium announced they have engaged in constructive dialogue with the members of IPAS’s board and management designed to enhance long-term shareholder value. Subsequent to this one representative from Millennium joined the board and has since resigned.
Legal counsel to iPass Shareholders for Change
% Outstanding 7.7% Cost Basis Not Avail Company Info Share Price 1.19 Revenue 177M Market Cap 72M Enterprise Value 24M Net Cash 50M EBITDA 1M 52 wk. range 0.89 – 2.35 EV/EBITDA 20.5
Integrated Silicon Solutions, Inc. (ISSI) Activist Investor: Starboard Value; Oliver Press Partners
Investor Info Catalyst Info Shares 3,074,150 Catalyst:
Starboard increased its ownership from 7.2% to 9.7% since ISSI announced a deal to be sold for $19.25/share Comment: We initially covered ISSI on November 28 Starboard disclosed a 7.4% “active” stake and nominated five candidates for election to the ISSI board. On December 1 Starboard/Oliver Press issued a letter outlining the reasons why they are nominating director candidates to the board. http://www.prnewswire.com/news-releases/starboard-group-delivers-letter-to-issi-ceo-and-board-of-directors-300002470.html On March 12 ISSI agreed to be sold for $19.25/share https://finance.yahoo.com/news/issi-enters-definitive-merger-agreement-131500566.html
Legal counsel to Starboard Value
% Outstanding 9.7% Cost Basis 15.19 Company Info Share Price 18.45 Revenue 330M Market Cap 578M Enterprise Value 454M Net Cash 130M EBITDA 31M 52 wk. range 11.03 – 18.88 EV/EBITDA 14.5
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JDS Uniphase Corporation (JDSU) Activist Investor: Sandell Asset Management
Investor Info Catalyst Info Shares ~4,140,540 Catalyst:
Sandell issued a letter to JDSU shareholders urging them to demand that better governance practices at the Lumentum spin-off entity http://www.businesswire.com/news/home/20150416005796/en/Sandell-Issues-Open-Letter-Shareholders-JDS-Uniphase#.VTEOApMWBTI Comment: We initially covered JDSU on September 10, 2014 when the Company announced plans to separate into two industry leading public companies. http://finance.yahoo.com/news/jdsu-separate-two-industry-leading-201223641.html On October 1 Sandell sent a letter to JDSU's board saying the Company must commence a formal auction of its CCOP business and stated the stock does not currently reflect the value of the 8.9 billion in NOLs http://www.sec.gov/Archives/edgar/data/912093/000090266414003943/p14-1996exhibit_1.htm
Legal counsel to Sandell Asset Management
% Outstanding ~1.8% Cost Basis Not Avail Company Info Share Price 12.99 Revenue 1.7B Market Cap 3.0B Enterprise Value 2.7B Net Cash 281M EBITDA 154M 52 wk. range 10.29 – 16.61 EV/EBITDA 17.5
The Macerich Company (MAC) Activist Investor: Land & Buildings and Orange Capital
Investor Info Catalyst Info Shares Not Avail Catalyst:
On April 15, Land & Buildings and Orange Capital formed an investment group to pressure The Macerich Company over its rejected Simon property bid and announced it will pursue litigation to nominate four directors to the board http://www.sec.gov/Archives/edgar/data/912242/000090266415002211/p15-1134exhibit_1.htm
Legal counsel to Orange Capital
% Outstanding Not Avail Cost Basis Not Avail Company Info Share Price 82.47 Revenue 1.2B Market Cap 13.2B Enterprise Value 19.1B Net Cash -6.2B EBITDA 685M 52 wk. range 62.62 – 95.93 EV/EBITDA 27.8
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Myers Industries, Inc. (MYE) Activist Investor: GAMCO Investors
Investor Info Catalyst Info Shares 6,607,410 Catalyst:
On April 17, GAMCO issued a press release announcing that ISS and Glass Lewis recommend shareholders vote on its proxy card at the annual meeting http://www.sec.gov/Archives/edgar/data/69488/000080724915000080/mye_53.pdf Comment: We initially covered MYE on July 6 2007 highlighting Gamco’s opposition to a previously announced merger agreement and Gamco’s unsuccessful attempts to elect four individuals to the company’s nine member board at the 2009 annual meeting, three individuals at the 2010 annual meeting, two individuals at the 2011 annual meeting and two individuals at the 2012 annual meeting. On February 15, 2012 Gamco sent a letter to MYE recommending two nominees for election to the board On March 13, 2012 we reported Gamco had filed preliminary proxy materials to elect two individuals to MYE’s board. Gamco’s nominees were defeated at the April 2012 Annual meeting. On February 21, 2013 GAMCO nominated one individual for election to MYE’s board. MYE entered into a settlement agreement with GAMCO to add GAMCO’s nominee to the board. On November 20, 2014 GAMCO announced it is presenting a proposal to MYE requesting that the Board of Directors take the necessary steps to ensure that the Company does not engage in a transaction, either through acquisition of assets, stock or otherwise, by which the Company would acquire an operating business, until the Company completes the sale of the Lawn & Garden Segment and returns 50% of its cash flow to shareholders. The cash flow should be returned to shareholders within two years following the completion of the sale. On January 28, 2015 GAMCO announced it will nominate three or more directors to the board of MYE On February 19 GAMCO nominated three candidates to the board. On March 30 GAMCO filed preliminary proxy materials to elect 3 directors. http://www.sec.gov/Archives/edgar/data/69488/000092189515000764/prec14a05687010_03272015.htm On April 2 GAMCO sent a letter to the Chair of MYE's compensation committee requesting additional information about the "claw back" comments in this year's proxy statement. http://www.sec.gov/Archives/edgar/data/69488/000080724915000061/mye_49.pdf On April 14, GAMCO issued a presentation depicting a "motion picture" of over a decade of inaction and poor oversight by MYE's board http://www.gproxyonline.com/
Legal counsel to GAMCO
Proxy Solicitor to Myers Industries
% Outstanding 20.63% Cost Basis Not Avail Company Info Share Price 17.14 Revenue 624M Market Cap 531M Enterprise Value 762M Net Cash -232M EBITDA 60M 52 wk. range 13.94 – 24.74 EV/EBITDA 12.7
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Qualcomm Incorporated (QCOM) Activist Investor: Jana Partners
Investor Info Catalyst Info Shares Catalyst:
On April 13 Jana disclosed a $2B investment in QCOM and said it has been in constructive dialogue with the company for the past couple of months regarding buybacks, reorganizing the board, spinning off its chipset business.
Legal counsel to Jana Partners
% Outstanding Cost Basis Company Info Share Price 68.57 Revenue 26.9B Market Cap 114B Enterprise Value 96B Net Cash 18B EBITDA 9.4B 52 wk. range 62.26 – 81.97 EV/EBITDA 10.3
River Valley Bancorp (RIVR)
Activist Investor: Thomas Davee
Investor Info Catalyst Info Shares 128,203 Catalyst:
Davee sent a letter to the Chairman of RIVR concerning compensation and dilution resulting from the 2014 stock issuance. Davee stated that he intends to vote against the proposal to approve on an advisory basis executive compensation.
% Outstanding 5.1% Cost Basis Not Avail Company Info Share Price 23.23 Revenue 20M Market Cap 59M Enterprise Value 98M Net Cash -40M EBITDA N/A 52 wk. range 19.70 – 26.80 EV/EBITDA N/A
Rovi Corporation (ROVI)
Activist Investor: Engaged Capital
Investor Info Catalyst Info Shares ~530,000 Catalyst:
Engaged filed its definitive proxy statement seeking to elect 3 new directors to ROVI's board and issued a presentation to support its campaign http://www.sec.gov/Archives/edgar/data/1424454/000092189515000960/dfan14a09455012b_04162015.htm Comment: We initially covered ROVI on March 11 when Engaged Capital sent a letter to Rovi's board expressing frustration with the lack of progress on placing new directors and, as a result, announced four candidates for election http://www.businesswire.com/news/home/20150312005207/en/Engaged-Capital-Sends-Letter-Board-Rovi-Corporation#.VQGFd-EWBTI
Legal counsel to Engaged Capital
% Outstanding 0.60% Cost Basis Not Avail Company Info Share Price 19.36 Revenue 542M Market Cap 1.7B Enterprise Value 2.4B Net Cash -800M EBITDA 186M 52 wk. range 17.03 – 26.44 EV/EBITDA 13.0
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Rosetta Stone Inc. (RST) Activist Investor: Nierenberg Investment Management (NIM)
Investor Info Catalyst Info Shares 1,513,795 Catalyst:
On April 17 NIM was offered a board seat; NIM highlighted the attractive attributes about RST and outlined what it intends to accomplish after joining the board. Comment: We initially covered RST on June 16, 2014 when NIM changed its filing status from "passive" to "active" and disclosed an 8% ownership commenting that it does not think that the focus at RST is tight enough. Extracted from NIM’s June SEC filing: We have shared the following concerns with RST’s management and board:
--We fear that RST’s “initiative overload” may be causing sub-optimal execution and impairing free cash flow. We find it difficult to believe, for example, that all of the many product, pricing, distribution, and channel initiatives being pursued in RST’s North American consumer (NAC) business are equally worthy. We urge management to identify the single most powerful thing it can do to maximize NAC free cash flow, so that RST could then devote the vast bulk of its attention to identifying and driving the one or two most important things which could accelerate the growth of and boost the profitability of RST’s fast-growing SAAS E&E business.
--Our experience has taught us that far too often companies spend desperately and indiscriminately to reignite growth in a legacy business which has stopped growing—at the risk of impairing their profitability, balance sheets, and their ability to focus on growing other more promising businesses. Our hope for RST is that, with a much tighter focus on the valuable assets it owns today, the company could double EBITDA in 2015 compared with current 2014 guidance, accelerate the growth of its SAAS E&E business to a rate materially faster than it has guided, and rebuild cash per share back towards $5. We urge RST not to make any further acquisitions until it first digests what it has swallowed and focuses the company’s strategy much more tightly.
--RST also needs to communicate its focused strategy in a much simpler and more compelling manner to the investment community.
--The composition of RST’s board should evolve into a “post-venture” board which possesses relevant digital marketing expertise and customer/end-user domain experience consistent with RST’s tightened strategic focus. Currently we believe that the board is too small. Also, we fear that its composition more reflects where the company comes from than where it is going. We at D3 have suggested a number of director candidates for the board’s consideration.
We suspect that many of our substantive views about the company are shared by other investors.
RST’s current share price reflects investor concern that the company is a wasting asset. We believe, however, that the company, focused and executing well in the right direction, has enormous potential. We believe that focused strategy, execution, and messaging could significantly increase the company’s market value in a relatively short period of time, and that more appreciation could follow. We know that management has heard D3’s message and we urge them to move quickly and decisively to complete RST’s turnaround. On August 7 NIM told RST's management that the current share price reflects investor concern that the company is a wasting asset and urged them to move quickly and decisively. On August 21 Osmium Capital changed its filing status from “passive” to “active” and disclosed a 9.9% ownership position. On August 25, NIM announced that it welcomes Osmium Capital 9.9% “active” involvement with RST. On November 19, 2014 RST agree to add 1 Osmium representative to the Board (10.67% at $11.17/sh) http://www.sec.gov/Archives/edgar/data/1316729/000119312514419280/d824376dex2.htm In addition, Osmium outlined a 4-point plan to increase the stock price to $20-$26/share. http://finance.yahoo.com/news/osmium-partners-four-point-action-133000181.html On March 16, 2015, NIM announced it is supportive of RST's refocusing strategy and realigning resources around its Global Enterprise and Education segment; NIM also recommended several changes in executive leadership.
% Outstanding 7.0% Cost Basis 10.66 Company Info Share Price 8.22 Revenue 262M Market Cap 178M Enterprise Value 112M Net Cash 62M EBITDA -43M 52 wk. range 7.16 – 12.32 EV/EBITDA Negative
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Chemical & Mining Co of Chile (SQM) Activist Investor: SailingStone Holdings
Investor Info Catalyst Info Shares 17,939,691 Catalyst:
On April 14 SailingStone submitted a candidate for election to SQM's board Comment: We initially covered SQM on March 23 when SailingStone announced it had increased its ownership from 6.14% to 14.98% and said it may have discussions with the company about board composition. On March 26 SailingStone criticized the board for its lack of independence and conflicts of interest, and recommended a reconstitution of the board.
% Outstanding 14.90% Cost Basis 29.57 Company Info Share Price 19.75 Revenue 2.0B Market Cap 5.2B Enterprise Value 5.8B Net Cash -700M EBITDA 681M 52 wk. range 15.02 – 32.50 EV/EBITDA 8.5
Tempur Sealy International (TPX) Activist Investor: H Partners
Investor Info Catalyst Info Shares 6,075,000 Catalyst:
H Partners sent a letter to shareholders urging them to vote against the re-election of three incumbent directors at the May 8 annual meeting http://www.sec.gov/Archives/edgar/data/1206264/000092189515000976/dfan14a10304002_04172015.htm Comment: We initially covered TPX on February 2, 2015 when H Partners disclosed a 9.97% "active" stake in TPX On February 16 H Partners sent a letter to the board demanding immediate leadership change. https://finance.yahoo.com/news/tempur-sealys-largest-shareholder-h-124200685.html On February 20 Chieftan Capital (5.78% shareholder) sent a letter to TPX supporting H Partners’ call for a CEO and board change. On March 24, 2015 H Partners filed preliminary proxy materials to solicit votes against three incumbent directors (TPX has a majority vote policy). http://www.sec.gov/Archives/edgar/data/1206264/000092189515000689/prec14a10304002_03202015.htm On March 30 H Partners submitted a demand to inspect the company's books and records to investigate possible corporate mismanagement and waste as well as breach of fiduciary duties by certain board members http://www.sec.gov/Archives/edgar/data/1206264/000092189515000759/ex991to13da410304002_032615.pdf On April 7 H Partners launched a website http://www.fixtempursealy.com/ to support its "Vote No" Campaign On April 13 Chieftan announced it has voted against the Company's director nominees.
Legal counsel to H Partners
% Outstanding 9.97% Cost Basis 39.90 Company Info Share Price 57.69 Revenue 2.9B Market Cap 3.5B Enterprise Value 5.1B Net Cash -1.5B EBITDA 344M 52 wk. range 46.51 – 62.00 EV/EBITDA 14.3
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TheStreet, Inc. (TST) Activist Investor: Cannell Capital
Investor Info Catalyst Info Shares 3,081,118 Catalyst:
Cannell announced it is calling for a withhold vote for directors and executive compensation proposals at the 2015 annual meeting Comment: We initially covered TST in our December 23, 2011 Catalyst Research Report, highlighting FiveMore’s December 23 letter to the board saying that the time has come to take immediate action. In the letter FiveMore stated: (1) TST is in urgent need to a strategic and financial review to ascertain the best options for shareholders and (2) they intend to nominate one person for election to the board to help TheStreet reshape its future. A copy of FiveMore’s 2011 letter is available here: http://www.sec.gov/Archives/edgar/data/1080056/000151316211000363/lettertotheboard5.htm On January 6, 2012 FiveMore increased its ownership in TST from 6.34% to 7.6% since sending a letter to the Company on December 23, 2011. On December 3 Cannell Capital sent a letter to Jim Cramer, a director at TST, recommending the board (i) sell the company, (ii) Cramer resign from CNBC and focus on TST, and (iii) Cramer reduce his compensation by 70% http://www.sec.gov/Archives/edgar/data/1080056/000144738714000065/tst1128201413d.txt
% Outstanding 8.95% Cost Basis 1.75 Company Info Share Price 1.80 Revenue 61M Market Cap 63M Enterprise Value 25M Net Cash 34M EBITDA -0.6M 52 wk. range 1.62 – 2.70 EV/EBITDA Negative
Wynn Resorts Ltd. (WYNN) Activist Investor: Elaine Wynn
Investor Info Catalyst Info Shares 9,539,077 Catalyst:
Elaine Wynn issued a press release stating that her ex-husband and co-founder Steve Wynn supports her re-election to the board. http://www.sec.gov/Archives/edgar/data/1174922/000143774915007527/wynne20150416_dfan14a.htm Comment: We initially covered WYNN on March 5 when Elaine Wynn announced that she is seeking board representation after the company did not re-nominate her as a director http://www.sec.gov/Archives/edgar/data/1174922/000110465915017215/a15-6045_3dfan14a.htm On March 16 Elaine Wynn sent a letter to WYNN shareholder requesting they refrain from voting until they receive her proxy material http://www.sec.gov/Archives/edgar/data/1174922/000110465915019845/a15-6045_4dfan14a.htm On March 20 Wynn launched a website in her proxy campaign against WYNN. http://www.sec.gov/Archives/edgar/data/1174922/000143774915005688/ex99-I.htm On March 23 Elaine Wynn issued a shareholder presentation outlining why she is "A Uniquely Qualified Candidate for the Board" http://www.sec.gov/Archives/edgar/data/1174922/000143774915005880/ex99-1.htm On March 24 Elaine Wynn sent a letter to stockholders to "Set the Record Straight" http://www.sec.gov/Archives/edgar/data/1174922/000143774915005962/wynne20150324_dfan14a.htm
% Outstanding 9.5% Cost Basis Not Avail Company Info Share Price 127.29 Revenue 5.4B Market Cap 13B Enterprise Value 18B Net Cash -5B EBITDA 1.6B 52 wk. range 131.63-246.88 EV/EBITDA 11.7
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PLATINUM SPONSORS – Legal Advisers
Olshan Frome Wolosky LLP is a law firm dedicated to providing personal service tailored to the specific requirements and concerns of the firm’s clients. Olshan is widely recognized as a preeminent law firm in the activist strategy area, and represents experienced activist investors, funds new to the activist area, as well as other investment and hedge funds. Olshan has extensive experience advising clients in a wide range of activist strategies, from private negotiations with management to public, high profile proxy contests, including expertly and efficiently handling litigation relating to activist matters. We also specialize in mergers and acquisitions and hostile takeovers, with extensive expertise in these matters. Olshan’s highly regarded attorneys provide a full range of legal services and are uniquely positioned to provide expert advice regarding the complicated and nuanced legal issues facing activist investors today. Contact: Steve Wolosky, Partner Email: [email protected] Tel: +1 212.451.2333
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