Jeff Ubben's activist firm ValueAct Capital has filed an amended 13D with the SEC regarding its stake in Baker Hughes (BHI). Per the filing, ValueAct now owns 7% of BHI with over 29.88 million shares.
This is down from the 38.88 million shares they owned at the end of the second quarter. The filing indicates they sold shares in early August and at the very end of September. Most of the transactions were at weighted average prices between $49.60 and $50.71.
Ubben's firm has been busy lately and we've highlighted how ValueAct recently filed 13D's on Trinity Industries and CBRE Group as well.
Per Google Finance, Baker Hughes is "engaged in the oilfield services industry. The Company is a supplier of oilfield services, products, technology and systems used in the oil and natural gas industry around the world. The Company also provides industrial products and services for other businesses, including downstream chemicals, and process and pipeline services. It conducts its operations through its subsidiaries, affiliates, ventures and alliances. The Company has four geographical operating segments: North America, Latin America, Europe/Africa/Russia Caspian and Middle East/Asia Pacific. The Company also has an Industrial Services segment, which includes the downstream chemicals business and the process and pipeline services business. The Company's oilfield products and services are of approximately two categories, Drilling and Evaluation or Completion and Production. The Company's Industrial Services consists of its downstream chemicals and process, and pipeline services businesses."
Monday, October 3, 2016
ValueAct Capital Reduces Baker Hughes Stake
Tuesday, March 15, 2016
Jeff Ubben's Interview with CNBC
CNBC's Kelly Evans sat down with activist investment manager Jeff Ubben of ValueAct Capital recently. Here's a summary of his latest thoughts:
On his recent portfolio activity: "We have been selling a number of our companies where we have been there, done all we could, the stocks are fairly valued... and it's been hard to redeploy that." They sold some Adobe, MSCI, Microsoft, and Motorola Solutions.
He notes the only compelling investment they've found value in has been Rolls Royce (RR.L).
On valuations: He notes that last valuation cycle the bubble was largely public and this time around, more and more companies are private so the bubble could burst slower he guessed.
On TwentyFirst Century Fox (FOX/FOXA): He likes the transition from old media to new media and wants to 'get rid of the middleman' by going direct to consumer. He thinks James Murdoch is terrific and can lead the change.
On his stakes in Halliburton (HAL) / Baker Hughes (BHI): If the deal closes, he thinks ValueAct will do really well there. If it doesn't close, he says people have kind of forgotten what happens to Baker's balance sheet with receiving a break-up fee.
On Valeant (VRX): This interview was shown yesterday and today VRX is down 47% on guidance cut and default worries. But Ubben's comments at the time were that CEO Michael Pearson is "incredibly driven." ValueAct spearheaded the effort to place him as CEO many years ago. Ubben also said that "we're solving problems (at the company) as we speak" but also noted that "we haven't been able to control the narrative at all." ValueAct has owned VRX for years and at one point it was a hugely successful play for them, but with shares plummeting this year, they've basically come close to round-tripping their gains.
Embedded below is the video of Ubben's interview:
Thursday, June 11, 2015
ValueAct Capital Reduces Valeant Pharmaceuticals Stake
Jeff Ubben's activist investment firm ValueAct Capital today released a statement indicating that they've reduced their Valeant Pharmaceuticals (VRX) position:
"ValueAct Capital Management, L.P. announced today that it has sold 4.2 million shares of Valeant Pharmaceuticals International, Inc. (NYSE: VRX; TSX: VRX) in brokers' transactions on the NYSE. ValueAct Capital's CEO Jeffrey W. Ubben said: "Mike Pearson and the Valeant team's exceptional performance have once again caused our investment in Valeant to grow in value to well above 20% of our funds' assets, and we are again compelled to reduce our position to rebalance our overall portfolio. We have owned Valeant shares for over nine years and have sold shares on three previous occasions for the same portfolio management purposes. After this sale, our investment in Valeant will continue to be well in excess of $3.0bn and will be one of the largest investments in our funds. I look forward to continuing to work with Mike and my fellow members of the Board of Directors."
After the sale, ValueAct should still own over 15.1 million shares. ValueAct was instrumental in bringing Pearson on board as CEO and has benefited greatly. This has been a consensus hedge fund favorite stock for some time, with Bill Ackman acquiring a VRX stake recently as well.
Valeant also announced a new CFO, Robert Rosiello. He's a former McKinsey M&A executive and should fit right in given Valeant's acquisitive strategy (Pearson also used to previously work at McKinsey).
Where Does ValueAct Allocate The Proceeds?
The question now becomes: where does ValueAct put this freed up capital to work? While they could always initiate a new position, or keep it in cash for the time being, it also wouldn't be surprising to see it allocated to some of their existing stakes given where shares of some of these companies currently trade.
The first option is 21st Century Fox (FOX). They've previously purchased shares numerous times when trading at $32.50 or below and FOX is currently hovering close to those levels. ValueAct just added to their FOX position in late May and could look to make it even larger after accumulating their position over numerous quarters. They also just filed an amended 13D on Fox today which shows that their ownership stake is in an LP named Volpe Velox, which is Latin for 'quick fox.' ValueAct currently owns over 43.5 million shares of FOX, or 5.5% of the company.
CNBC's David Faber today reported that Rupert Murdoch is set to step down as CEO (but retain his role as Executive Chairman) and son James Murdoch will take the helm, with brother Lachlan Murdoch assisting. It's unclear if this reorganization would occur this year or next and the company's board is set to review succession plans soon.
Faber also notes that COO Chase Carey is supposedly stepping down from his role as well. There seems to be some uncertainty as to the timing though it's possible Carey will remain with the company in an advisory role. Some investors will be dismayed by Carey's potential departure or reduction in role. Others could view it as a potential opportunity for FOX to bid for Time Warner (TWX) again in the future. With ValueAct's activist involvement behind the scenes here, it will be interesting to see what's next for the company.
Another place ValueAct could allocate their VRX proceeds is to Halliburton (HAL) / Baker Hughes (BHI). They were out accumulating shares of both during the first quarter and their exposure to both combined was almost $3 billion as of the end of Q1. Both shares are trading higher than levels in Q1 though, as ValueAct looks for the companies to combine.
A third option for Ubben's firm is Precision Castparts (PCP). As our Hedge Fund Wisdom newsletter highlighted, ValueAct initiated a brand new stake in the company during the first quarter. While this position is much smaller than their others, PCP shares are still currently trading around levels where Ubben's firm could have been buying in Q1. So they could easily ratchet up their stake around similar prices now. Not to mention, numerous other prominent investors were buying PCP in Q1, including Berkshire Hathaway, Third Point, Farallon Capital and more.
Another potential option is shares of WESCO (WCC). ValueAct initiated a small position in the company during the first quarter. However, shares are trading slightly higher than Q1 levels now.
While the above seem like the most likely to garner incremental capital, ValueAct also owned stakes in the following companies as of the end of Q1 (in descending order of position size): Microsoft (MSFT), CBRE (CBG), Adobe (ADBE), Motorola Solutions (MSI), Willis Group (WSH), Agrium (AGU), Allison Transmission (ALSN), MSCI (MSCI), and Armstrong Worldwide (AWI).
For more on ValueAct, be sure to check out partner Mason Morfit on ValueAct's approach and Microsoft.
Tuesday, September 17, 2013
Alex Roepers' 5 New Ideas: Value Investing Congress Presentation
We're posting up notes from the 2013 Value Investing Congress in New York. Next up is Alex Roepers of Atlantic Investment Management and his presentation was called: "Insights from 25 Years of Constructive Shareholder Activism." He also pitched 5 new ideas.
Alex Roepers' Value Investing Congress Presentation
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Be sure to check out the other presentations from the New York VIC here.
