Corvex Management Goes Activist on ForeScout Technologies

Keith Meister's hedge fund firm Corvex Management has filed a 13D with the SEC regarding shares of ForeScout Technologies (FSCT).  Per the filing, Corvex now owns 7.2% of ForeScout with over 3.34 million shares.  However, the 13D is being filed jointly with Jericho Capital Asset Management which also owns shares, bringing their collective exposure to 14.5% of the company with over 6.68 million shares.

The filing shows Corvex as buying throughout September and October initially at prices around $35.xx but really ramped up their buying when shares traded down to $25.xx.

The 13D also contains information about their new activist stance: "After the close of business on October 18, 2019, the Corvex Persons agreed with the Jericho Persons to work together to engage with the Issuer and its management regarding its business and prospects. The Corvex Persons and the Jericho Persons believe that combining their complementary expertise, skill sets and perspectives will be beneficial in discussions with the Issuer. The Corvex Persons and the Jericho Persons anticipate having private discussions with the Issuer as soon as practicable."

Per Yahoo Finance, ForeScout Technologies "provides network security products in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. It offers CounterACT that provides for visibility and control capabilities across campus information technology and Internet of Things (IoT) devices, operational technology devices, data center physical and virtual devices, and cloud virtual devices; and SilentDefense, which offers visibility and control capabilities within the operational technology portion of the network."

Corvex Management Increases CenturyLink Position

Keith Meister's activist firm Corvex Management has filed an amended 13D with the SEC regarding its stake in CenturyLink (CTL).  Per the filing, Corvex now owns 6.6% of the company with 36.54 million shares. 

They've increased their stake recently by acquiring a net of 550,000 shares of common stock on August 3rd and 17th, while also acquiring 5 million shares underlying call options.

At the end of the second quarter, Corvex only owned 18.99 million shares, so they've clearly been out accumulating more exposure in recent months. 

CenturyLink is Corvex's largest position.  Their total CTL stake is comprised of 19.58 million shares of common stock and 17 million shares underlying call options.  Of the calls, 4 million of those shares have an exercise price of $28 and expiration of October 20, 2017.  Another 8 million of those have a strike of $30 and same expiration date, while another 5 million are in January 2018 $23 calls. 

We've also highlighted previous portfolio activity from Corvex here.

Per Google Finance, CenturyLink is "n integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. Its segments include business, which provides strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers, and consumer, which provides strategic and legacy products and services to residential customers. Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services. As of December 31, 2016, it served approximately 5.9 million broadband subscribers and 325,000 Prism TV subscribers."

Corvex Management Adds To Energen Position

Keith Meister's activist firm Corvex Management has filed an amended 13D regarding shares of Energen (EGN). Per the filing, Corvex now owns 8.8% of the company with over 8.51 million shares.

This is an increase of over 1.1 million shares since late June when Corvex was previously buying EGN.  The filing notes they were buying in early July and as recent as July 19th. They bought between $47.11 and $50.57.

Corvex's stake is actually comprised of 8.1 million shares of common stock and various stock options. They have 415,200 shares underlying call options that have an exercise price of $50 and expiration of October 20, 2017. They've also sold the same amount of call options with an exercise price of $60 and the same expiration in October. Also, they've sold the same amount of put options with an exercise price of $40 and expiration of January 19, 2018.

For more on this fund, we've highlighted how Corvex has bought another stock recently.

Per Google Finance, Energen is "an oil and natural gas exploration and production company. The Company is engaged in the exploration, development and production of oil and natural gas properties and natural gas. Its operations are conducted through subsidiary, Energen Resources Corporation and occur within the Midland Basin, the Delaware Basin and the Central Basin Platform areas of the Permian Basin in west Texas and New Mexico. The Company is focused on increasing its oil, natural gas liquids and natural gas production and proved reserves through active development and/or exploratory programs in the Permian Basin. As of December 31, 2016, oil, natural gas liquids and natural gas represented approximately 60%, 20% and 20% of its reserves. As of December 31, 2016, its development activities added approximately 327 million barrels of oil equivalent (MMBOE) of reserves from the drilling of 623 gross development, exploratory and service wells and 73 well recompletions and pay-adds."

Corvex Management Ups CenturyLink Stake

Keith Meister's activist firm Corvex Management has filed an amended 13D with the SEC regarding its position in CenturyLink (CTL).  Per the filing, Corvex now owns 5.6% of CTL with over 30.99 million shares.  This is made up of 18.99 million shares and 12 million shares underlying call options.

This is an increase of around 1 million shares from the beginning of May when Corvex first revealed its stake in CTL.  The latest filing was made due to activity on June 16th and it notes they bought CTL at $25.91.

We previously highlighted Meister's presentation on CenturyLink at the Sohn Conference New York.  CenturyLink is merging with Level 3, which Meister thinks is a game changer.

Per Google Finance, CenturyLink is "an integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. Its segments include business, which provides strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers, and consumer, which provides strategic and legacy products and services to residential customers. Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services. As of December 31, 2016, it served approximately 5.9 million broadband subscribers and 325,000 Prism TV subscribers."

Corvex Management Adds To Energen Stake

Keith Meister's activist firm Corvex Management has filed an amended 13D with the SEC regarding its stake in Energy (EGN).  Per the filing, Corvex now owns 6.6% of EGN with over 6.39 million shares.

This is up from the 5.37 million shares Corvex owned at the end of May when they previously filed a 13D. 

The latest filing was made due to activity on June 14th and it notes that Covex acquired over the counter American style call options and sold over the counter European style put options.  You can view all their transactions here.

You can view other recent portfolio activity from Corvex Management here.

Per Google Finance, Energen is "an oil and natural gas exploration and production company. The Company is engaged in the exploration, development and production of oil and natural gas properties and natural gas. Its operations are conducted through subsidiary, Energen Resources Corporation and occur within the Midland Basin, the Delaware Basin and the Central Basin Platform areas of the Permian Basin in west Texas and New Mexico. The Company is focused on increasing its oil, natural gas liquids and natural gas production and proved reserves through active development and/or exploratory programs in the Permian Basin. As of December 31, 2016, oil, natural gas liquids and natural gas represented approximately 60%, 20% and 20% of its reserves. As of December 31, 2016, its development activities added approximately 327 million barrels of oil equivalent (MMBOE) of reserves from the drilling of 623 gross development, exploratory and service wells and 73 well recompletions and pay-adds."

Corvex Management Boosts Energen Position

Keith Meister's activist hedge fund Corvex Management has filed a 13D with the SEC regarding its stake in Energen (EGN). Per the filing, Corvex now owns 5.5% of EGN with over 5.37 million shares. This is up from the previous 1.34 million shares they owned at the end of the first quarter. 

The filing was made due to activity on May 22nd.  The 13D notes that they've been quite active buying call options and selling put options and you can view the full list of transactions here.

They've had discussions with management and Corvex feels that:

"(Energen) has some of the most attractive leaseholds for oil and gas development in the Permian Basin. However, despite this leading asset position, the Issuer’s operational performance has fallen short of its peer companies, leading to underperformance both in terms of financial results and shareholder returns. As a result, the Reporting Persons’ believe the Issuer needs to strongly consider what actions can be taken to enhance and maximize shareholder value – including a review of the potential value delivered to shareholders through a change of control transaction given the recent wave of acquisitions in the Permian Basin at per acre values well in excess of the Issuer’s current implied value."

For more on this fund, Keith Meister also recently presented at the Sohn Conference New York and you can catch up on his presentation here.

Per Google Finance, Energen is "an oil and natural gas exploration and production company. The Company is engaged in the exploration, development and production of oil and natural gas properties and natural gas. Its operations are conducted through subsidiary, Energen Resources Corporation and occur within the Midland Basin, the Delaware Basin and the Central Basin Platform areas of the Permian Basin in west Texas and New Mexico. The Company is focused on increasing its oil, natural gas liquids and natural gas production and proved reserves through active development and/or exploratory programs in the Permian Basin. As of December 31, 2016, oil, natural gas liquids and natural gas represented approximately 60%, 20% and 20% of its reserves. As of December 31, 2016, its development activities added approximately 327 million barrels of oil equivalent (MMBOE) of reserves from the drilling of 623 gross development, exploratory and service wells and 73 well recompletions and pay-adds."

Keith Meister's Thesis on YUM Brands China Spin-Off; Talks Pandora & Williams

Keith Meister of activist firm Corvex Capital was just interviewed by CNBC where he talked about YUM Brands (YUM), Pandora (P), shareholder activism and more.  On the market in general, he said he's bullish on his individual positions but not necessarily the market in general.  He notes, "I'm not a buyer of the market here, per se.  My guess is we're more near a top than a bottom."

Meister on YUM Brands Spin-Off

Corvex is the largest shareholder of YUM and will spin-off its China business to shareholders on November 1st and he believes it's "1 plus 1 equals more than 2."

He notes that the remaining HoldCo will be a 98% franchised, asset light business in the quick service food industry.

Meister says the China co is a different story as 7,500 restaurants (KFC, Pizza Hut) in China gives them a huge advantage as they were first to move and have become the dominant player there in the QSR space and they can now go into tier 2 and tier 3 cities.  He acknowledges that it will be a volatile ride, but says it can be an 'up and to the right' chart over time.

He argues it should trade at 10-12x EBITDA after spin-off, but acknowledged it could start trading around 8x which would basically be trough earnings.  "The market's not gonna make it easy to own YUM China, but that's where I think the best return will be."

He feels the remaining HoldCo will trade more like an annuity, with smoother returns. 

On shareholder activism, Meister says that these types of investors are simply trying to buy good businesses, help make positive changes, and acting like an owner in the public markets.


Meister on Pandora (P)

Meister still owns Pandora (P).  When asked if they're going to sell themselves, he said he didn't know.  He compared the company to competitor Spotify and notes the gap in valuation as one is private and one is public.   He argues that music is so core to many tech players these days (Apple, Amazon, etc) and he says "so it's a hugely valuable piece of property for someone who wants to win."

He concedes the streaming business is a commodity business, but argues that Pandora isn't due to the built up userbase as an asset.


Meister on Williams (WMB)

The Corvex founder also talked about Williams (WMB) and has left the board and commended the company on the work done.  He personally feels that the company has "undermaximized the opportunity set" over the past 5 years.

He thinks it could probably be worth more as part of another entity.  He thinks consolidation is happening and you don't want to be left out.  "It's hard to build new pipeline, so it makes existing pipeline more valuable." 

We'll post up the video of the interview once it's released.  Be sure to also check out CNBC's interview with David Tepper from yesterday, as well as their conversation with Carl Icahn.

Corvex Management Trims Fidelity National Financial Position

Keith Meister's activist firm Corvex Management has filed an amended 13D regarding their position in Fidelity National Financial (FNF).  Per the filing, Corvex now owns 4.8% of FNF with over 13.19 million shares.

This is a decrease of over 5.93 million shares from the end of the first quarter.  They were selling at various points in June, July, and as late as August 2nd.  The bulk of their sale came at a price of $36.58.

You can view other recent activity from Corvex here.

Per Google Finance, Fidelity National Financial is "is a provider of title insurance, technology and transaction services to the real estate and mortgage industries. The Company's segments include Title, Black Knight, FNF Core Corporate and Other, Restaurant Group, and FNFV Corporate and Other. Its business is organized into groups, including FNF Core Operations and FNF Ventures (FNFV). The Company offers title insurance through its title insurance underwriters: Fidelity National Title Insurance Company, Chicago Title Insurance Company, Commonwealth Land Title Insurance Company, Alamo Title Insurance and National Title Insurance of New York Inc., which collectively issue more title insurance policies than any other title company in the United States. The Company, through its subsidiary, ServiceLink Holdings, LLC (ServiceLink), provides mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans."

Keith Meister & Eric Mandelblatt Step Down From Williams Board

Keith Meister's activist hedge fund firm Corvex Management has filed an amended 13D regarding its stake in Williams Companies (WMB) jointly along with Soroban Capital's Eric Mandelblatt.

Per the filing, the two gentlemen have stepped down from Williams' board of directors since the company was unwilling to replace Alan Armstrong as CEO.

You can view Meister's resignation letter here and Mandelblatt's here.

The 13D notes that their respective stakes in the company remain unchanged.

Per Google Finance, Williams is "an energy infrastructure company focused on connecting North America's hydrocarbon resource plays to markets for natural gas, natural gas liquids and olefins. The Company's segments include Williams Partners, Williams NGL & Petchem Services, and Other. Its Williams Partners segment consists of its consolidated partnership in Williams Partners L.P., including gas pipeline, which consists of interstate natural gas pipelines and pipeline joint project investments, and midstream business, which provides natural gas gathering, treating, processing and compression services. Its Canadian midstream operations include an oilsands off gas processing plant, NGL/olefin fractionation facility and the Boreal Pipeline. The Williams NGL & Petchem Services segment consists of Texas Belle pipeline, domestic olefins pipeline assets and Canadian growth projects under development. Its Other segment includes corporate operations and Canadian construction services company."

Corvex Management Boosts Signet Jewelers Stake, Files 13D

Keith Meister's activist hedge fund Corvex Management has filed an amended 13D with the SEC on shares of Signet Jewelers (SIG).  Per the filing, Corvex now owns 8.3% of Signet with over 6.52 million shares.

The filing notes that Corvex "commend the Issuer for the announcement in its quarterly earnings call on May 26, 2016 of its commitment to conduct, along with its advisor Goldman Sachs, a strategic evaluation of its credit portfolio.  The Reporting Persons strongly support the Issuer’s review of credit portfolio alternatives, and believes that it is essential that the Issuer complete this review as quickly as reasonably practicable, and thereafter promptly both announce to the shareholders and implement the actions which were determined to create the greatest enhancement to financial and shareholder value."

Corvex also indicates they purchased shares of SIG in April and May with the bulk of the activity coming on May 26th at $98.25 per share.

The firm previously owned 5.93 million Signet shares at the end of the first quarter.

Per Google Finance, Signet Jewelers is "a retailer of jewelry, watches and associated services in the United States, Canada and the United Kingdom. The Company's segments are the Sterling Jewelers division, the UK Jewelry division, the Zale division, which consists of Zale Jewelry and Piercing Pagoda, and the Other segment. The Other segment includes subsidiaries involved in purchasing and conversion of rough diamonds to polished stones. The Company operates retail jewelry stores in various real estate formats, including mall-based, free-standing, strip center and outlet store locations. It operates approximately 3,620 stores and kiosks across approximately five million square feet of retail space. The Sterling Jewelers division operates approximately 1,540 stores. Its stores operate nationally in malls and off-mall locations as Kay Jewelers, and regionally under various mall-based brands. Zale Jewelry consists of brands, including Zales Jewelers and Zales Outlet."

Corvex Management Adds To Signet Jewelers Stake

Keith Meister's activist hedge fund Corvex Management has filed an amended 13D with the SEC regarding its position in Signet Jewelers (SIG).  Per the filing, Corvex now owns 7.2% of SIG with over 5.74 million shares.

They've increased their position size by 235,000 shares.  They were buying sporadically in January, February and early March at prices between $117.40 and $121.68.

Corvex's filing says they commend Signet "for its new capital allocation policy and look forward to continuing to engage in constructive and collaborative conversations."

You can view additional portfolio activity from Corvex here.

Per Google Finance, Signet Jewelers is "a Bermuda-based specialty retail jeweler by sales in the United States and United Kingdom. The Company also has stores in the Republic of Ireland and Channel Islands. It is engaged in the retailing of jewelry, watches and associated services. The business is managed as two geographical operating divisions: the US division and the UK division."

Corvex Management Increases ARCP Stake, Writes Letter to Board

Keith Meister's hedge fund firm Corvex Management has filed an amended 13D with the SEC regarding their position in American Realty Capital (ARCP).  They now own 7.8% of the company with exposure to over 70.6 million shares.

This is an increase of over 5.9 million shares since Corvex first reported its ARCP stake in December.  They acquired call options and common stock in late December/early January and sold put options as well.

The activist filing also includes an open letter that Corvex has written to the board of ARCP and to candidates for Chairman and CEO.  You can read the full letter here.

Per Google Finance, American Realty Capital is "a real estate investment trust (REIT). The Company owns and acquires single-tenant, freestanding commercial real estate primarily subject to medium-term net leases with credit quality tenants." 

Corvex Management Takes American Realty Capital Stake

Keith Meister's activist hedge fund Corvex Management has filed a 13D with the SEC regarding American Realty Capital (ARCP).  Per the filing, Corvex now owns 7.1% of the company with over 64.7 million shares (with 56.77 million of those shares underlying call options).  This is a new position for the hedge fund.

The activist filing indicates that Corvex has met with company management and want to add members to the board.  The filing was required due to activity on December 18th.

We've highlighted additional recent portfolio activity from Corvex here.

Per Google Finance, American Realty Capital is "a real estate investment trust (REIT). The Company owns and acquires single-tenant, freestanding commercial real estate primarily subject to medium-term net leases with credit quality tenants."

Corvex Management & Soroban Capital Add To Williams Position

Keith Meister's hedge fund firm Corvex Management filed an amended 13D in conjunction with Eric Mandelblatt's Soroban Capital regarding their joint position in Williams Companies (WMB). 

Per the filing, the hedge funds now own 8.39% of the company with over 62.68 million shares (though if you add in the options, they'd own 9.11% with around 68 million shares).

This would indicate that the hedge funds have increased their exposure by around 21 million more shares since the end of the third quarter.  The filing was made due to activity on November 18th.

Per Google Finance, Williams is "an energy infrastructure company focused on connecting North America’s hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGLs), and olefins. The Company’s operations span from the deepwater Gulf of Mexico to the Canadian oil sands. It operates in three segments: Williams Partners, Midstream Canada & Olefins and Other."

For more on Corvex in particular, we recently posted up Meister's presentation on Crown Castle International.

Corvex Capital's Presentation on Crown Castle (CCI)

At the Robin Hood Investors Conference the past few days, Keith Meister of Corvex Capital sat down with CNBC to talk about his positions.

He owns almost $1 billion worth of Crown Castle International (CCI), the wireless tower operator.  He says it's the best combination of real estate and telco.  He likes their fixed cashflow and that they benefit from the big

He says the problem with CCI is they need to payout cash to shareholders by ramping up a dividend and growing that dividend at 10% a year.

Meister also noted that he's a passive shareholder of Allergan (AGN) and likes being aligned with Bill Ackman's Pershing Square.  Simply put, he wants AGN to sell their company for the highest price possible.


Embedded below is the video of Meister's interview at Robin Hood:



As well as Meister's interview on Allergan:





Additionally, here's Corvex's presentations on CCI via embedded slideshows below:

Letter to CCI Shareholders:




CCI Presentation:




Robin Hood CCI Presentation:




You can download the .pdf's here.

Corvex Management Increases Fidelity National Financial Stake

Keith Meister's activist hedge fund Corvex Management has filed an amended 13D with the SEC regarding their position in Fidelity National Financial (FNF).  Per the filing, Corvex now owns 7.3% of the company with 20.24 million shares.

This is an increase of over 1.95 million shares since the end of the second quarter.  The filing was made due to activity on September 8th.  They bought 535,000 shares at $26.64 in late July and 1.4 million shares in early September at $27.60.

Per Yahoo Finance, Fidelity National Financial is "together with its subsidiaries, provides title insurance, technology, and transaction services to the real estate and mortgage industries in the United States."


Corvex's FNFV Group Stake

Corvex at the same time filed another 13D on FNFV Group common stock (FNFV).  Per that filing, they own 2.9% of the company with 2,694,572 shares. 

FNFV was spun-off from FNF.

It's also worth pointing out that Corvex had been selling these shares throughout July and then recently sold 2.5 million shares at $15.28 in early September.

Per Yahoo Finance, Fidelity National Financial Ventures "operates as an investment arm of Fidelity National Financial, Inc. and is based in United States."

Corvex & Soroban Expect to Increase Williams Companies Stake (13D Filing)

Keith Meister's activist hedge fund firm Corvex Management and Eric Mandelblatt's Soroban Capital have jointly filed an amended 13D with the SEC regarding their position in Williams Companies (WMB). 


Corvex/Soroban To Increase Williams Companies Stake

The filing details that the Hart Scott Rodino waiting period has expired and as such, "Corvex intend to promptly exercise their deeply in-the-money physically settled call options and Corvex and Soroban also expect to acquire additional shares, further increasing their beneficial ownership stake."

Per the 13D, the hedge funds have disclosed a 7.14% ownership stake in WMB with exposure to over 48.8 million shares.

That figure doesn't include their cash-settled swaps and options regarding an additional 19.2 million shares, so their aggregate exposure to the name can rise as high as 9.96% (with 68 million shares). And now we get word that they're likely to buy more.


Seeking Board Seats As Well

The filing indicates that the hedge funds want Mandelblatt and Meister to join the company's board, but they haven't been able to come to an agreement with the company.

We've previously posted about their Williams Companies stake earlier this year.

Per Google Finance, Williams Companies is "an energy infrastructure company focused on connecting North America’s hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGLs), and olefins. Its operations span from the deepwater Gulf of Mexico to the Canadian oil sands. It operates in three segments: Williams Partners, Midstream Canada & Olefins and Other. Its interstate gas pipeline and domestic midstream interests are held through its investment in Williams Partners L.P. (WPZ). It owns the general-partner interest and a 70% limited-partner interest in WPZ. Williams also owns a Canadian midstream and domestic olefins production business, which processes oil sands off-gas and produces olefins for petrochemical feedstocks." 

For more additional recent portfolio activity from Corvex, click here.

Corvex Management Starts Activist Signet Jewelers Position

Keith Meister's activist firm Corvex Management has filed a 13D with the SEC regarding Signet Jewlers (SIG).  Per the filing, Corvex now owns 7.8% of the company with over 6.2 million shares. 

This is a newly revealed stake and the filing was required due to activity on January 14th.  As has been customary with Corvex's other recent positions, they've bought both common stock and call options, as well as sold puts. 

It looks like they were buying November 2014 $53 calls and February 2015 $51 calls as well as selling November 2014 $53 puts and February 2015 $51 puts.


Activist Talks

The filing indicates Corvex has already talked with management and found talks to be "constructive." 

Corvex has approached Signet about "options for enhancing shareholder value through various strategic alternatives including, but not limited to, leveraging the Issuer's credit receivables, optimizing capital structure, accelerating M&A and/or return of capital to shareholders, utilizing the Issuer's offshore corporate structure, and general corporate matters."


About Signet Jewelers

Per Google Finance, Signet Jewelers is "a specialty retail jeweler by sales in the United States and United Kingdom, and also has stores in the Republic of Ireland and Channel Islands. The Company is engaged in the retailing of jewelry, watches and associated services. The business is managed as two geographical operating divisions: the US division and the UK division. Its stores trade nationally in malls and off-mall locations as Kay Jewelers (Kay), and regionally under a number of mall-based brands. Destination superstores trade nationwide as Jared The Galleria Of Jewelry (Jared)."

You can view more of Corvex's recent portfolio activity here.

Corvex & Soroban Add To Williams Companies Position

Keith Meister's activist hedge fund Corvex Management and Eric Mandelblatt's Soroban Capital have filed an amended 13D with the SEC regarding their position in Williams Companies (WMB).  Per the filing, the hedge funds have disclosed they now own 6.74% of WMB with over 46 million shares.

The filing indicates their latest activity was on January 9th, 2014 and this stake is up from the previous 5% of the company they owned.  We initially highlighted when these hedge funds went activist on Williams last month.

Keep in mind, however, that their position disclosure is not inclusive of cash-settled swaps and options which reference an additional 21.3 million shares.  If you add in this exposure, they would own 9.86% of the company.

Per Google Finance, Williams Companies is "an energy infrastructure company focused on connecting North America’s hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGLs), and olefins. Its operations span from the deepwater Gulf of Mexico to the Canadian oil sands. It operates in three segments: Williams Partners, Midstream Canada & Olefins and Other. Its interstate gas pipeline and domestic midstream interests are held through its investment in Williams Partners L.P. (WPZ). It owns the general-partner interest and a 70% limited-partner interest in WPZ. Williams also owns a Canadian midstream and domestic olefins production business, which processes oil sands off-gas and produces olefins for petrochemical feedstocks."

Corvex Management & Soroban Capital Go Activist on Williams Companies (WMB)

Keith Meister's activist hedge fund Corvex Management and Eric Mandelblatt's Soroban Capital Partners have entered into an agreement and jointly filed a 13D on shares of Williams Companies (WMB). 

Per the filing, they've disclosed a 5.28% stake in WMB with Corvex owning 13.6 million shares and another 5 million shares underlying call options. Soroban has revealed ownership of 17.4 million shares.

This excludes cash-settled swaps and options which represent an additional 24,213,599 shares.  If these were aggregated together, Corvex and Soroban would have an aggregate economic interest of 8.82% of the company with over 60.3 million shares.

It looks like Corvex was buying call options and selling puts in Late October and throughout November while Soroban was buying shares in late October.


Activist Investment Thesis

The hedge funds have met with management and the Board to discuss the company's operations, finances, strategy and governance.  The filing indicates,

"(Williams) has a strong competitive position in an attractive industry with tremendous growth opportunities but recent operational and financial missteps have prevented the Issuer’s Shares from reflecting full value. The Reporting Persons intend to discuss the following with one or more of the persons referenced above (among other topics): enhancing the structure and value of the Issuer’s investments and assets; evaluating and financing of capital projects; optimizing the Issuer’s capital structure and dividend policy; improving the Issuer’s operational and financial execution; and the potential for participating in strategic combinations given the rapid pace of consolidation in the midstream energy industry."

Meister and Mandelblatt are also looking to join the Board.


See other recent activity from Corvex here.