Leon Cooperman Acquires 5.3 Percent Stake In Harbinger Group

Leon Cooperman Acquires 5.3 Percent Stake In Harbinger Group
Leon Cooperman photo (CC BY-ND 2.0) Insider Monkey

Omega Advisors, a hedge fund with approximately $10.1 billion assets under management (AUM) and its affiliates headed by legendary investor Leon Cooperman, acquired a total of 7,600,000 shares or 5.3% stake in Harbinger Group Inc (NYSE:HRG).

Beneficial ownership

Based on the filing of Omega Advisors with the Securities and Exchange Commission (SEC), the affiliates of Omega Advisors such as Capital LP owns 1,566,800 shares (410 shares are restricted stock), Investors LP owns 446,200 shares (140,000 shares restricted), Equity LP 638,400 shares (181,000 shares restricted), Overseas owns 1,463,500 shares (459,000 restricted), and Cooperman owns 1,000,000 shares, and 2,385,100 shares are owned by Managed Accounts of which 310,000 are restricted.

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The hedge fund explained that the restricted stock refer to restricted shares bought in a private sale from Harbinger Capital Partners Master Fund I L.P on September 26, 2013. The shares are being transferred under an exemption under the Securities Act of 1933, and are being restricted from sale or disposition except pursuant to an effective registration statement. Last December 11, 2013, Harbinger Group Inc (NYSE:HRG) filed a registration statement with the SEC, and is not yet effective.

Harbinger Group Inc (NYSE:HRG) is a diversified holding company primarily engaged in acquiring businesses that generate attractive returns and free cash flow over the long-term. Phil Falcone is the chairman and CEO of the company.

Offering of senior unsecured notes

Last week, Harbinger Group Inc (NYSE:HRG) announced the offering of its senior unsecured notes worth $200 million. The company plans to use the net proceeds from the offering for working capital and corporate purposes including financing of future acquisitions and businesses.

The holding company said the offering will be made only to qualified institutional buyers pursuant to Rule 144A under the Securities Exchange Act of 1933, and certain persons in offshore transactions pursuant to regulation S under the Securities Act.

Harbinger Group Inc (NYSE:HRG) said the notes that will be issued will not be registered under the Securities Act, thereby being restricted from being offered or sold in the United States without registration or applicable exemption from the registration requirement of the Securities Act.

Harbinger fiscal 2013 financial results/stock performance

Harbinger Group Inc (NYSE:HRG) reported that its revenue for the fiscal 2013 increased 23.7% due to the strong growth of all its operating segments. The company’s operating income rose 80.1% to 737.4 million from $409.5 million in 2012. The company posted a net loss of $94.2 million of $0.67 losses per share.

The stock price of Harbinger Group Inc (NYSE:HRG) rose from $7.33 to $12.14 per share over the past 52 weeks. The stock is trading around $11.38 per share in the morning trading in New York on Friday, January 24.

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