JANA Partners Reveals New Activist Position in Oil States International ~ market folly

Tuesday, April 30, 2013

JANA Partners Reveals New Activist Position in Oil States International

Barry Rosenstein's hedge fund JANA Partners today filed a 13D with the SEC revealing a brand new position in Oil States International (OIS).  Per the filing, JANA now owns 9.1% of the company with 5,000,002 shares.

The 13D was required due to portfolio activity on April 19th.  They've been out buying OIS shares as recently as April 29th at a price of $76.66.  JANA's reported 5 million share position is inclusive of options to purchase 824,600 shares. 

Drilling down this position, we see that JANA owns 3,640 call options with a strike price of $65 and 4,606 call options with a strike of $60, both with expiration on June 3rd, 2013.

Additionally, they've sold 3,640 put options with a strike price of $65 that expire on June 3rd, 2013.  JANA's been busy of late as they also recently revealed a position in Ashland (ASH) as well.

JANA's New Activist Position

In the 13D filing, we see that JANA has pursued shareholder activism as the purpose of transaction section notes that JANA:

"acquired the Shares because it believes the Shares are undervalued and represent an attractive investment opportunity. The Reporting Person has had discussions with the Issuer’s management relating to the Issuer’s corporate structure including a discussion on April 26, 2013 regarding separating its Well Site Services, Offshore Products, and Tubular Services segments (referred to collectively as "Oilfield Services") from its Accommodations segment and the formation of a REIT for Accommodations. The Reporting Person also may seek to discuss the Issuer’s capitalization, operations, strategy and future plans."

Per Google Finance, Oil States International is "a provider of specialty products and services to natural resources companies worldwide. The Company operates in oil and natural gas and coal producing regions, including Canada, onshore and offshore the United States, Australia, West Africa, the North Sea, South America and Southeast and Central Asia. Its customers include national oil companies, oil and natural gas companies, onshore and offshore drilling companies, other oilfield service companies and mining companies. It operates in four segments: accommodations, offshore products, well site services and tubular services."

For more on this activist investor, be sure to check out a very interesting interview with Barry Rosenstein.

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