Jana Partners Benefits From Whole Foods Sale

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In case you missed it

Activism this week (Friday June 16)

  • John Mackey wanted everyone to know he wasn’t going to be pushed around
  • A spate of Canadian proxy fights may be due to booming stocks, or a weak market
  • General Electric’s new CEO
  • A new vulnerability report

What the activism world is talking about

Like activists in 47% of situations where M&A forms part of their demands, Jana Partners had a simple recipe for Whole Foods that was belied by its slate of experienced operators: get the company sold. In the end, it took just over two months to achieve a probable $320 million profit, or around a 40% return. Other activists who reportedly passed on entreaties from shareholders may be kicking themselves. Alternatively, Jana’s timing was impeccable, its efforts were largely irrelevant. Amazon’s takeover bid has not been enough to satisfy Neuberger Berman, the other agitator in the stock, which seems to be hoping for a bidding race. The rest of the financial world will be wondering what the impact of Amazon’s newly found acquisitiveness will be on other companies; short sellers are factoring the deal into their bets against potential competitors, more traditional activists will be wondering whether they can guess Amazon’s next target.

Our most-read story last week

Whole Foods CEO insults Jana (Activist Insight Online login required)

What we’ll be watching for this week

  • Will Third Point Partners launch an activist campaign at electronics giant Philips after the Sunday Times reported that it was building a stake in the 125-year-old company?
  • Will Cypress Semiconductor’s founder and former CEO Thurman Rodgers accept the last-minute settlement proposed by the company?
  • Taiwanese and Japanese companies start facing shareholders later this week. Will activists prevail at their select number of targets?
  • Will Russian billionaire Viktor Vekselberg successfully install the chairman of Chelsea Football Club to the board of London-listed gold miner Petropavlovsk, and fellow shareholders Sothic Capital Management and M&G Debt Opportunities Fund win board seats in the double proxy contest at the company?

Short update

It’s a little too early for Muddy Waters Research to party like it’s 1999. The short seller may have picked the Hong Kong company bearing that ticker, Man Wah Holdings, for its latest short but the stock has not stayed down. This month alone, shares have fallen from HK$7.80 to HK$6.03 and then returned to HK$7.22 on management’s rebuttals. Activist short campaigns at companies listed on Hong Kong’s exchange are on course to meet last year’s five-year high. Only U.S. exchanges have been more deeply mined.

Stat of the week

So far this year (as of June 16, 2017), 5.7% of public demands made by activists were business strategy related, up from 4.4% in the same period last year.

View more trends and stats like these in our 2017 Annual Review.

For more information on our suite of activist investing products, visit our website.

Article by Activist Insight

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