Hedge Fund Carlson Capital Exits Portec Rail Products (PRPX) ~ market folly

Thursday, December 23, 2010

Hedge Fund Carlson Capital Exits Portec Rail Products (PRPX)

Last week, we revealed that hedge fund Carlson Capital had filed an activist 13D on shares of Portec Rail Products (PRPX). In it, they disclosed a 5.2% ownership stake in a company that was subject to a tender offer. Due to an amended 13D filed with the SEC after market close yesterday, Carlson has completely exited its position in PRPX. And although we don't know for sure, the likely reason could be below:

According to Reuters, "As of the subsequent offering period's expiration time, approximately 8,662,078 shares had been tendered and not properly withdrawn pursuant to the tender offer, which represented approximately 90.20% of the outstanding shares. L.B. Foster and Foster Thomas Company accepted for payment all shares that were validly tendered and not properly withdrawn, and paid for these shares in accordance with the tender offer's terms. L.B. Foster intends to effect a short form merger of Foster Thomas Company with and into Portec, with Portec being the surviving corporation, as soon as practicable. As a result of the merger, Portec will become a wholly owned subsidiary of L.B. Foster."

If you're slightly confused as to the tender offer timeline and Carlson's involvement, head to our previous post on PRPX. But as of December 21st, the hedge fund no longer owns shares.

Taken from Google Finance, Portec "manufactures, supplies and distributes a range of rail products, including rail joints, rail anchors, rail spikes, railway friction management products and systems, railway wayside data collection and data management systems, and freight car securement systems."

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