Elliott initiated a discussion with the board and management of Informatica regarding measures to maximize shareholder value.

Elliott Management and its affiliates collectively acquired 8% of the outstanding common stock of Informatica Corporation based on its13D filing with the Securities and Exchange Commission (SEC).

Investment details

Based on the filing, the aggregate purchase price of the shares of Informatica directly owned by Elliott is $29,865,820 and the total amount of the call options beneficially owned by the firm is around $22,921,197.

On the other hand, the aggregate purchase price of the shares directly owned by Elliott International is approximately $57,978,986 and the total purchase of the call options directly owned by the firm is around $44,495,707.

The filing showed that Elliott beneficially owned 1,852,496 shares of Informatica including 993,900 shares underlying options that are currently exercisable. Its stockholdings represent 1.7% of the outstanding common stock of the company.

Elliott International beneficially owns 3,596,085 shares of Informatica including 1,929,400 shares of underlying options that are currently exercisable. Its position accounts 3.3% of the outstanding common stock of the company.

Elliott, Elliott International and Elliott International Capital Advisors (EICA) collectively and beneficially own 5,448,581 shares of Informatica including 2,923,300 shares of underlying options currently exercisable. The firms’ stockholdings represent approximately 5% of the outstanding common stock of the company.

The firms collectively have 3% economic exposure in Informatica in accordance with the Derivative Agreements in the form of cash and settled swaps involving 1,105,000 and 2,145,000 shares of the company’s common stock.

Elliott says Informatica shares are “significantly undervalued”

Elliott and its affiliate firms made an investment in Informatica because their belief that the shares of the company are “significantly undervalued. The firms said they initiated a discussion with the board and management of the company regarding measures to maximize shareholder value.

Elliott and its affiliates also indicated that they may propose plans about potential changes in Informatica including its board composition, management, operations dividend policy, strategy and others.

Most recently, Elliott reached an agreement with EMC to add two directors to its board. The activist hedge fund has been pushing the company to spinoff VMWare.

Informatica is valuable acquisition target

Stifel analysts Tom Roderick and Matthew Van Vliet believed that Informatica’s results in the fourth quarter will meet or slightly beat consensus estimates.

According to them, during the latter part of the quarter, they observed that the company was in an “all hands deck” situation, but it has still” enough robust pipeline.”

The analysts also believed that the challenges confronting the company are well-known and understood by some of its investors that are interested in its direction towards long-term value.

They said, Informatica is a valuable strategic acquisition target for some companies including Oracle, IBM, SAP and EMC.

Stifel compared the current fight to Starwars, noting:

Long-time fans of Star Wars undoubtedly recall the famous battle between Darth Vader and Obi Wan Kenobi. Though Vader wins the battle, the memorable line is this: “If you strike me down, I shall become more powerful than you can possibly imagine.” In an odd – and admittedly obscure – fashion, we have begun to see a similar analogy in the setup for Informatica. Sentiment is poor, recent downgrades have investors concerned with near-term fundamentals, and yet, with investors and activists looking for the next Tibco, near-term Informatica weakness may simply bolster the case for a strategic exit or private equity outcome. In other words, strike INFA down all you want… we think it could actually make the stock stronger.

H/T David Benoit

Starwars: Elliott Acquires 8 Percent Stake In Informatica