Activists, Arbitrage, and Spin-offs, Oh My
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