Hedge Fund Solutions will be doing a multi-part series via Valuewalk over the next month. The research firm’s catalyst equity weekly research report highlighting activist investment campaigns.
See Highly Probable Activist Investing Targets here
Hedge Fund Solutions: Activist Investment Campaigns
AeroCentury Corp (ACY)
Activist Investor: Lee Beaumont
Catalyst:
On April 21 Beaumont issued a presentation seeking support for his appointment to the board.
http://www.sec.gov/Archives/edgar/data/1036848/000110465915029233/a15-7073_11dfan14a.htm
On April 23 Beaumont issued a shareholder letter outlining the need for new directors, highlighting the company’s continuing poor performance and excessive fees.
http://www.sec.gov/Archives/edgar/data/1036848/000104746915003825/a2224422zdfan14a.htm
Comment:
We initially covered ACY on December 5 when Beaumont proposes to acquire ACY for $12.50 per share in cash. http://www.sec.gov/Archives/edgar/data/1036848/000110465914085088/a14-25726_1ex99d1.htm
On December 17 ACY rejected Beaumont’s offer.
After having his $12.50/share offer rejected by ACY’s board, Beaumont sent a letter saying he is willing to discuss an increased offer before January 14 or he may seek board representation.
http://www.sec.gov/Archives/edgar/data/1036848/000110465915002165/a15-2302_1ex99d3.htm
On February 11 Beaumont nominated himself to the board of ACY.
http://www.sec.gov/Archives/edgar/data/1036848/000110465915008770/a15-4212_1ex99d4.htm
Associated Estates Realty (AEC)
Activist Investor: Land and Buildings
Catalyst:
AEC announced a deal to be sold to Brookfield Asset Management for $28.75/share.
https://finance.yahoo.com/news/brookfield-affiliate-acquire-associated-estates-131500468.html
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.
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
Ashford Hospitality Trust (AHT)
Activist Investor: UNITE HERE
Catalyst:
UNITE issued a presentation seeking support for improved corporate governance
http://www.sec.gov/Archives/edgar/data/1034426/000103442615000051/aht042315filing.htm
Comment:
We initially covered AHT on October 9 when UNITE HERE (a labor union representing represents workers at Ashford’s Sheraton Anchorage location) requested a record date to solicit a special meeting of shareholders
http://www.sec.gov/Archives/edgar/data/1034426/000103442614000020/newahtrelease.htm
On October 16 UNITE HERE issued a press release asking several questions relating the AHT’s spinoff of Ashford, Inc. http://www.sec.gov/Archives/edgar/data/1034426/000103442614000024/pr101614.htm
On November 3 UNITE HERE published a website www.unlock-ashford.org
AHT sent a letter to shareholders regarding UNITE’s request for a special meeting http://finance.yahoo.com/news/ashford-trust-sends-letter-shareholders-182500705.html
On November 5 ISS supported the call for a special meeting.
On November 7 Glass Lewis recommended shareholders not consent to call for a special meeting
Ballantyne Strong, Inc. (BTN)
Activist Investor: Fundamental Global Partners
Catalyst:
On April 22 BTN announced a settlement with Fundamental GP to expand the board by two and add two new directors. http://www.sec.gov/Archives/edgar/data/946454/000114420415024218/v407874_dfan14a.htm
Comment:
We initially covered BTN on March 16, 2015 when Fundamental GP nominated seven candidates to the board of BTN.
http://www.sec.gov/Archives/edgar/data/946454/000114420415016288/v404652_dfan14a.htm
Bellatrix Exploration (BXE)
Activist Investor: Orange Capital
Catalyst:
Orange Capital increased its ownership from 14.28% to 15.4% since adding representatives to the board
Comment:
We initially covered BXE on August 18 when Orange Capital disclosed a 5.3% ownership and announced its intention to discuss, among other things (i) hiring an independent financial advisor tasked to provide the Board with recommendations on strategic alternatives, capital allocation and improved investor communications; (ii) the size and composition of the Board; (iii) steps to raise the valuation to be in line with its intrinsic value, which current valuation is well below the intermediate sized company peers in the Canadian exploration and production sector (based on both price to proved-developed reserves and on enterprise value to debt adjusted cash flow); (iv) refraining from future dilutive equity issuances and outlining a clear use of proceeds for all newly raised capital; and (v) exploring alternatives to highlight the value of the infrastructure assets, including but not limited to improving disclosure on the cost and fair market value of the midstream infrastructure and / or exploring a possible joint venture, initial public offering or sale of the midstream assets.
On September 4 Orange Capital increased its ownership from 5.3% to 6.4%
On September 12 Orange Capital increased its ownership from 6.4% to 7.4%
On September 25 Orange Capital increased its ownership from 7.4% to 9.2%
On October 3 Orange Capital increased its ownership from 9.2% to 10.2%
On November 12 Orange Capital increased its ownership to 12.4%
On December 3 Orange Capital increased its ownership from 12.4% to 13.5%
BXE agreed to appoint 2 Orange Capital reps to the board effective Jan 1.
http://www.sec.gov/Archives/edgar/data/1426756/000090266414004609/p14-2333exhibit2.htm
MFS Intermarket Income Trust I (CMK)
Activist Investor: Bulldog Investors
Catalyst:
Bulldog submitted a shareholder proposal requesting the board authorize a self-tender offer at NAV.
http://www.sec.gov/Archives/edgar/data/853770/000150430415000051/EX-99.txt
See full PDF below.
