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Ackman’s Pershing Square Sells Another Chunk Of Beam Shares

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Bill Ackman’s Pershing Square disclosed in an amended 13D filing yesterday that it had sold 1.85 million shares of BEAM Inc (NYSE:BEAM) at an average price of $83.27 per share,  aggregating $154.06M.

According to the filing, Ackman and the other reporting entities now beneficially hold 11,668,545 shares in BEAM Inc (NYSE:BEAM), representing a stake of 7.1%.

This is down from a holding of 13,518,545 shares, an 8.3% stake, disclosed on January 31, 2014, after the sale of 7.3 million shares.

Ackman selling the news, booking profits

Shares of BEAM Inc (NYSE:BEAM) took off last month after Japanese drinks maker Suntory unveiled its acquisition of the company for $13.6B.

In 2010, Ackman invested about $765M in Fortune Brands, a diversified conglomerate which split into three companies reportedly at his behest. BEAM Inc (NYSE:BEAM) was one of the three offshoots. Ackman was clear in his vision for BEAM that its impressive repertoire of brands would attract deal interest from large competing drink makers.

His position was validated after Suntory announced its takeover, and the shares of the company jumped 25% that same day. Suntory will pay $83.50 cash per share of BEAM Inc (NYSE:BEAM). According to a media report, Ackman likely gained $342.5M in paper profits on his stake the day of the announcement.

January was kind to Ackman

Though Ackman faced losses on his positions on Herbalife Ltd. (NYSE:HLF) and J.C. Penney Company, Inc. (NYSE:JCP) through 2013, in January 2014 the news on BEAM Inc (NYSE:BEAM) boosted the returns on his Pershing Square hedge fund.

That, taken with gains on his Herbalife Ltd. (NYSE:HLF) short position due to a fall in the price of the company after a Senator called for an investigation into its business practices, helped Pershing Square return 3.8% for the month. Creditable, considering most hedge funds lost money.

Record sales at Beam

Earlier this month, BEAM Inc (NYSE:BEAM) reported 2013 net sales at a record $2.55B, attributing the performance to “strong demand for the company’s premium whiskey and tequila brands, successful new-product innovations, and an approximate 1-point benefit from a return to growth in India.”

It reported year-end earnings from continuing operations of $365.5 million, down 9.4% from $403.4 million in 2012. Earnings per diluted share were $2.24, down 10.8% from $2.51 in 2012.

Shares of BEAM Inc (NYSE:BEAM) closed at $83.21 yesterday, down 0.08%.

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