David Einhorn Starts Cairn Energy Stake ~ market folly

Tuesday, March 13, 2012

David Einhorn Starts Cairn Energy Stake

David Einhorn's hedge fund Greenlight Capital have disclosed a position in Cairn Energy PLC (LON:CNE) traded in the UK. They now own 3.06% stake in the company with 19,966,666 voting rights.

It looks like this is what happened: Cairn Energy recently returned $3.5b to shareholders on the register on February 3rd, 2012 via an issue of 'B' shares following the disposal of a 40% shareholding in Cairn India to Vendanta.

Greenlight appear to have purchased after the return of capital to shareholders and after the share price fell in reaction to it. The one thing we can be sure of is that Greenlight bought some shares on March 7th that took them over the 3% ownership threshold that requires a regulatory disclosure.

Per Google Finance: "Cairn Energy PLC (Cairn) is an independent oil and gas exploration and production company. It is organized into two business units: Capricorn Group, being Capricorn Oil Limited and its subsidiary undertakings, and the Cairn India Group. There are two operating segments. Cairn India Limited Group’s operations are primarily within India.

Capricorn Group’s operations focus on exploration activities in Greenland and Mediterranean. The Capricorn Group also includes its interests in Nepal, and a share in North Indian assets operated by Cairn India Limited. Cairn Energy PLC exists to accumulate activities and results of Cairn UK Holdings Limited, an intermediate holding company and direct parent of Cairn India Limited, and Cairn Energy PLC company results."

For other portfolio takeaways from this hedge fund, be sure to read Greenlight's letter to investors.

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