Phil Falcone's Harbinger Capital Reduces Tate & Lyle Position (TATE) ~ market folly

Tuesday, September 7, 2010

Phil Falcone's Harbinger Capital Reduces Tate & Lyle Position (TATE)

Philip Falcone's hedge fund Harbinger Capital Partners have reduced their UK position in Tate & Lyle (LON: TATE). Per UK regulatory disclosures, Harbinger now own less than 3% of the company's shares outstanding due to portfolio activity on the 27th of August. Falcone's hedge fund actually disclosed two sales with the most recent leaving Harbinger in possession of 14,161,182 shares of TATE. Back in July, we detailed how Harbinger owned 8.95% of Tate & Lyle previously. As such, this is a pretty sizable reduction in position size. This portfolio news comes right after we saw hedge fund Harbinger Capital add to Crosstex Energy (XTXI).

Since their position in Tate & Lyle is below the 3% threshold, the UK regulatory body does not require further disclosure of the position from Harbinger. So, we don't know if they're slowly selling completely out of the name or merely reducing position size. And unfortunately, we won't get any other regulatory updates unless they for some reason raised their stake back above the 3% threshold, which would trigger another filing.

Harbinger's thesis on Tate & Lyle was to supposedly push for a link with Bunge (BG), the US food group which Harbinger also previously owned. Back in 2008, Tate & Lyle's then CEO Iain Ferguson said that Harbinger's investment in the company stemmed from Falcone's habit of focusing on scarce assets that are hard to replicate. In the case of TATE, he was focusing on their US plants, including the first corn wet mill built in twelve years, Fort Dodge. But, given Falcone's vast reduction in his position sizing, it appears that his interest in this name has waned.

Taken from Google Finance, Tate & Lyle is "a manufacturer of renewable food and industrial ingredients. The Company, through its subsidiaries, is engaged in developing, manufacturing and marketing food and industrial ingredients made from renewable resources. The Company operates through four divisions: Food and Industrial Ingredients, Americas; Food and Industrial Ingredients, Europe; Sugars, and Sucralose. Tate & Lyle participates mainly in four markets: food and beverage; industrial ingredients; pharmaceutical and personal care, and animal feed. The Company holds a 16.6% interest in Tapioca Development Corporation."

View our previous coverage of Harbinger's portfolio for more.

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