ValueAct Capital Sells Allison Transmission Shares Back to Company ~ market folly

Tuesday, February 7, 2017

ValueAct Capital Sells Allison Transmission Shares Back to Company

Jeff Ubben's activist firm ValueAct Capital recently announced an agreement with Allison Transmission (ALSN) to sell shares back to the company, per an 8-K filed with the SEC.

Allison will buy 10.52 million shares at a price of $34.50 per share and the transaction is expected to close tomorrow.  ValueAct will no longer own a stake and its member will not seek re-election on the board of directors. 

Just yesterday, we highlighted how ValueAct also sold some Microsoft (MSFT) shares.  Given these two sales, perhaps they're looking to put capital to work in another name?

Also worth noting: Ashe Capital Management, an owner of 6.1% of ALSN, just filed a 13D noting that they'd be nominating William Harker to the board of the company in absence of ValueAct's representative.

Per Google Finance, Allison Transmission "design and manufacture commercial and defense fully-automatic transmissions. The Company manufactures fully-automatic transmissions for medium- and heavy-duty commercial vehicles and medium-and heavy-tactical the United States defense vehicles. The Company operates through manufacture and distribution of fully-automatic transmissions segment. The Company's transmissions are used in a range of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (primarily school, transit and hybrid-transit), motorhomes, off-highway vehicles and equipment (energy, mining and construction) and defense vehicles (wheeled and tracked). The Company's transmissions are sold under the Allison Transmission brand name and remanufactured transmissions are sold under the ReTran brand name. The Company has developed over 100 different models that are used in over 2,500 different vehicle configurations."

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