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Activists, Arbitrage, and Spin-offs, Oh My

Recs

15

July 05, 2011 – Comments (5) | RELATED TICKERS: BLUD.DL , SUG.DL2 , TSRYY

I know, the title of this post is lame, but it's the first day of the week, Tuesday = Monday, so cut me some slack ;). 

I'm constantly looking for successful activist investors to follow along with while investing. One of the activists that I keep tabs on, ValueAct Capital appears to have struck again.

Today a company that I added in CAPS, alas not in real life, solely because of ValueAct's involvement with it soared. Immucor (BLUD) is up more than 30% this morning after agreeing to be bought out by TPG for $27 a share. Immucor makes equipment used to test blood prior to transfusions.  I just closed the pick with a gain of 37.76% since March 30th.

You can bet that I will be paying special attention the next time ValueAct becomes involved with a company.

Mergers & Acquisitions Cheat Sheet: Immucor and Western Union Lead the Way

In other less jovial news, it appears as though I missed out on $2/share in upside when I sold my stake in SUG last week.  ETE announced this morning that it is upping its offer for Southern Union to $40/share.  In addition, it is eliminating the strange merger security aspect of the deal that I originally found so attractive and eliminating the scummy $50 million consulting / non-compete agreement with SUG's current management.  SUG is now trading at $41.50.  I sold at around $39.50.  I'm certainly not going to cry over spilt milk, I made an amazing return on my investment in SUG.  I had a suspicion that a bidding war might erupt for the company and thought about holding on, but my original reason for investing in the situation had changed, so I am very comfortable with my sale.  I'm not a merger arbeteur (is that even a real word?).  That's a crowded world that I choose not to play in.

Last but not least, a recent spin-off that I added in CAPS a couple of weeks ago, Treasury Wine Estates (TSRYY.PK), is rumored to be the takeover target of a Chinese firm.  Its stock was up over 10% this morning in overseas trading (the jump hasn't shown up on the pink sheets yet).  It will be interesting to see if the takeover rumor is true and if $2.6 billion will get the deal done. Fosters just rejected a bid of $2.5 billion for the division last year.

Foster's Wine Spin-Off Surges on Report of Chinese Interest

Deej

5 Comments – Post Your Own

#1) On July 05, 2011 at 4:49 PM, djemonk (< 20) wrote:

Where do you hear about these takeovers, spinoffs, and guys like ValueAct?

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#2) On July 05, 2011 at 8:12 PM, TMFDeej (99.31) wrote:

Hey djemonk.  I wish that I had a simple answer for you, but unfortunately the answer to your question is reading, lots of reading.  I read all sorts of blogs and financial news sites every day.

Deej 

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#3) On July 06, 2011 at 8:19 AM, djemonk (< 20) wrote:

That's basically the answer I was looking for, thanks!

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#4) On July 11, 2011 at 5:47 PM, scruffy4life (77.67) wrote:

To the one called Deej-

If Scruffy picked SUG before the buyout on Caps, would that pick move over to ETE.

Much obliged,

Hmmm-Hrmmmm!

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#5) On July 12, 2011 at 10:55 AM, TMFDeej (99.31) wrote:

Hi Scruffy.  No the way CAPS works is your SUG pick would be closed out at whatever the buyout / conversion price ends up being.

Deej

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