Jana Partners Targets Rockwood Holdings, Fifth & Pacific

Jana Partners Targets Rockwood Holdings, Fifth & Pacific
Image source: Bloomberg Video Screenshot

Barry Rosenstein’s Jana Partners LLC focused its attention to another company, Rockwood Holdings, Inc. (NYSE:ROC), a manufacturer of specialty chemicals planning to exit its businesses. The hedge fund believes that the company is worth around $80 per share in a takeover, according to a report from Kelly Bit of Bloomberg.

Jana Partners Targets Rockwood Holdings, Fifth & Pacific

The activist hedge fund has 3.5 percent stake or 2.77 million shares of Rockwood Holdings, Inc. (NYSE:ROC) as of December, based on data from Bloomberg.  Jana Partners said in its letter to investors that it reduced its stock holdings in the company when its stock price went up after announcing its plant to exit the businesses.

This Odey Cub Is Waiting For A Pullback To Buy Financials

Crispin OdeyMichele Ragazzi's Giano Capital returned 1.9% for March, taking the fund's year-to-date performance to 1.7%. Since its inception, Ragazzi's flagship fund has produced a compound annual return of 7.8%. According to a copy of the €10 million fund's March update, a copy of which ValueWalk has been able to review, Giano's most significant investment at Read More

According to Jana Partners, Rockwood Holdings, Inc. (NYSE:ROC) could attract proposals from bigger chemical manufacturers after selling its other units. The company plans to concentrate its business operations in lithium and surface treatments.

In its letter, Jana Partners wrote, “We believe a ROC made up of lithium and surface treatments could make a very attractive takeover candidate for large multinational chemical names,” including BASF SE (ETR:BAS) (FRA:BAS)(PINK:BASFY), Albemarle Corporation (NYSE:ALB) and Sociedad Quimica y Minera (ADR) (NYSE:SQM).

In February, Seifi Ghasemi, chairman and chief executive officer of Rockwood Holdings, Inc. (NYSE:ROC) stated that he is seeking alternatives for the company’s three business units. The company might sell its performance additives unit, titanium-dioxide operations, and its ceramics business in Germany.

Last month, Reuters reported that Rockwood Holdings, Inc. (NYSE:ROC) is preparing to sell its performance additives together with its German titanium-dioxide businesses for more than $2 billion or 6.7x earnings before interest, taxes, depreciation, and amortization. The first bidding process is set by the end of April. Some of the potential bidders include Bain Capital, Permira, The Blackstone Group L.P. (NYSE:BX) and EQT Corporation (NYSE:EQT).

The stock price of Rockwood Holdings, Inc. (NYSE:ROC) is up by nearly 1 percent to $64.22 per share around 1:39 PM on Wednesday in New York.

On the other hand, Jana Partners also believe that the stock of Fifth & Pacific Companies Inc (NYSE:FNP) a fashion retailer, is worth $28 per share after the company sells its Lucky and Juicy brands.

Jana Partners said, “The Kate Spade brand has enormous runway for top line growth and for margin expansion. This opportunity was not at all reflected in our purchase price of FNP as Kate Spade’s potential was obscured by the weaker Lucky and Juicy brands. We believed focusing investors on Kate would lead to a major re-rating of the shares.”

The activist hedge fund acquired 2.8 percent stake or 3.29 million shares of Fifth & Pacific Companies Inc (NYSE:FNP) last December. Jana Partners reduced its stock holdings in the company when its stock price increased over reports that Fifth and Pacific received bids from VF Corp. and Leonard Green & Partners LP for its Lucky and Juicy brands.

No posts to display