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ValueAct Buys Armstrong World Industries, Microsoft, Fox

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ValueAct Capital’s 13F filing with the Securities and Exchange Commission (SEC) showed that its equity portfolio had a market value of approximately $13.52 billion for the second-quarter ended June 30, 2014.

Jeffrey Ubben is the founder, chief executive officer and chief investment officer of ValueAct Capital, which is known for acquiring significant stakes in a limited number of companies it believes undervalued.

The activist hedge fund’s primary intention in each of its investment is to work constructively with the board and management of the company to implement alternatives or strategies to unlock significant value or maximize returns for shareholders.


ValueAct Capital’s new stockholdings

During the quarter, ValueAct Capital’s new stockholdings include Armstrong World Industries Inc (NYSE:AWI) and Twenty-First Century Fox Inc (NASDAQ:FOX) Class B shares.

The activist hedge fund acquired 2,700,000 shares of Armstrong World Industries, Inc. (NYSE:AWI), a global producer of flooring products and ceiling systems. Its stake in the company is worth approximately $155.06 million.

Early this month, the latest 13D filing of ValueAct Capital showed that its stake in the company is already 16.8% or 9,200,000 shares. The stock closed $54.75 per share on Thursday. Therefore, its stake in the company is worth more than $503 million.

In June, Armstrong World Industries Inc (NYSE:AWI) reported disappointing second-quarter financial results. The company posted earnings of $0.60 per share, lower than the $0.66 per share expected by Wall Street analysts. Its revenue was $710 million compared with the $724.81 million consensus estimate.

ValueAct Capital purchased 2,663,083 Class B shares of Twenry-First Century Fox Inc (NASDAQ:FOX) worth approximately $91.15 million. Earlier this week, a report from CNBC indicated that the activist hedge fund amassed around 30 million shares in the media company worth as much as $1 billion.

The activist hedge fund supported the recent withdrawal of Twenty-First Century Fox Inc (NASDAQ:FOX) from its bid to acquire Time Warner Inc (NYSE:TWX). According to Ubben, his firm supported Fox’s “stand alone plan” and it believed it “would drive the stock higher.”

ValueAct Capital also supported the $6 billion stock repurchase program of the company. “We thought it was something they should do if they were to walk away, to remind people of their cash flow,” said Ubben.

ValueAct Capital’s increased positions

During the quarter, ValueAct Capital increased its stake in Microsoft Corporation (NASDAQ:MSFT) by 2,951,112 shares to $74,236,642 shares. Its stake in the software giant has a market value of more than $3.09 billion. Microsoft is the largest stockholding of the activist hedge fund. It accounts 22.88% of its equity portfolio.

ValueAct Capital also bought additional 1,208,171 shares of Msci Inc (NYSE:MSCI) to 9,341,288 shares worth around $428.29 million. The activist hedge fund also increased its position in the Class A shares of CBRE Group Inc (NYSE:CBG) by 3,085 shares to 32,165,849 shares worth approximately $1.03 billion.

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