ValueAct Capital Management, the activist hedge fund headed by Jeff Ubben increased its stake in Baker Hughes and disclosed its intention for the company in a regulatory filing with the Securities and Exchange Commission (SEC).
Based on its amended Schedule 13D filing, ValueAct increased its stake in Baker Hughes to 23,246,700 shares or approximately 5.3% of the outstanding common stock of the company.
Baker Hughes is waiting for regulatory to merge with Halliburton
Baker Hughes agreed to be acquired by Halliburton for $35 billion. The companies disclosed further divestiture plans last month to help obtain regulatory approvals and close the transaction.
Mr. Ubben previously stated that he loves the merger idea, and he wants the deal to get approved because of the oil price decline.
The stock price of Baker Hughes increased more than 1% to $55.27 per share at the time of this writing, around 1:34 in the afternoon in New York.
ValueAct plans to discuss enhancing shareholder value with Baker
In it filing, ValueAct decided to invest in Baker Hughes because it believes that the company’s securities were undervalued and represented an attractive investment opportunity.
Value Act also revealed its intention to talk to the management and Board of Baker Hughes regarding ways to enhance shareholder value.
According to the activist investor, it will discuss several issues related to the company’s business including asset allocation, capital allocation, capitalization, dividend policy, management and operation.
ValueAct also plans to discuss the company’s financial condition, mergers and acquisitions strategy, overall business strategy, executive compensation, corporate governance, and board composition. The activist investor said it will evaluate whether it makes sense to have a ValueAct employee on the Board of Baker Hughes.
ValueAct normally works with the management of companies behind the scenes to pursue its demands for changes to enhance shareholder value. In 2012, the activist investor obtained a seat on the board of Adobe Systems, and supported a controversial proposal urging the company to overhaul its business model and offer some of its products online for a monthly fee.
The following year, ValueAct secured a seat on the board of Microsoft although its stake in the software giant was less than 1%. It was the first time for the software giant to appoint an activist shareholder on its board. The move helped boost Microsoft’s stock price.