ValueAct Capital Files 13D on Alliance Data Systems ~ market folly

Monday, July 11, 2016

ValueAct Capital Files 13D on Alliance Data Systems

Jeff Ubben's activist investment firm ValueAct Capital has filed a 13D with the SEC regarding their stake in Alliance Data Systems (ADS).  Per the filing, ValueAct now owns 6.8% of the company with 4 million shares.

The filing indicates ValueAct was buying in mid-to-late June and early July at prices from $186.66 to $200.99.  ADS currently trades around $211.

This is up a sizeable amount from the 541,115 ADS shares they owned at the end of the first quarter.  Our Hedge Fund Wisdom newsletter flagged ValueAct's new purchase back in May.

The 13D notes that ValueAct intends to have discussions with management and the board about ways to enhance shareholder value.

Per Google Finance, Alliance Data Systems is "a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through three segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty; Epsilon, which provides end-to-end, integrated marketing solutions, and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs."

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