September 30, 2019 BARRON’S M11
13D Filings
Investors Report to the SEC
13Ds are filed with the Securities and Exchange Commission within 10 days of an entity’s
attaining a greater than 5% position in any class of a company’s securities. Subsequent
changes in holdings or intentions must be reported in amended filings. This material has
been extracted from filings released by the SEC from Sept. 19 through Sept. 25, 2019.
Source:InsiderScore.com
Activist Holdings
Progenics Pharmaceuticals ( PGNX )
Velan Capital and LTE Partners dis-
closed jointly on Sept. 19 that they added
658,061 shares to their stake in the cancer-
focused biopharmaceutical at prices of
$4.39 to $4.99 each from Sept. 3 to Sept.
- The investors now hold a total of
10,161,733 shares, equal to about 11.5% of
Progenics’ outstanding stock.
Velan and LTE issued a joint news
release on Sept. 18 that revealed that they
had filed a preliminary consent statement
with the Securities and Exchange Com-
mission in conjunction with delivery of a
written consent to Progenics that “seeks
to reconstitute” Progenics’ board. The in-
vestors wish to remove three “long-ten-
ured” directors, including the present
CEO, and add five independent nominees.
As part of their proposal, the new
board would ultimately choose a new
CEO. Velan and LTE have already dis-
cussed this with “leading search firms.”
They concluded that such changes are
“critical to ensure renewed focus and
commitment to unlocking stockholder
value.”
National Fuel Gas ( NFG )
Gamco Investors ( GBL ) revealed a 6.3%
stake in the natural-gas firm, equal to
5,457,229 common shares. That figure ac-
counts for the net sale of 15,968 shares
during the span of Sept. 11 through Sept.
18 at prices of $48.78 to $49.83 per share
each. Gamco said that it is reviewing
board nominees for the 2020 annual
stockholders meeting and will present a
proxy at that event, “requesting that the
[National Fuel Gas] board undertake the
necessary steps to declassify the board
and require that all directors” face annual
elections.
Original Filings
SpringWorks Therapeutics ( SWTX )
OrbiMed Advisors took a position in the
clinical-stage biopharmaceutical of
7,406,307 shares, or 17.1% of the tradable
stock. The figure includes the purchase of
275,000 shares through the SpringWorks
initial public offering at $18 per share
that closed on Sept. 17. The majority of
OrbiMed’s SpringWorks holding resulted
from pre-initial public offering preferred
investments that converted into common
stock immediately after the completion of
SpringWorks’ IPO.
Increases in Holdings
Acadia Pharmaceuticals ( ACAD )
Baker Brothers Advisors reported an in-
creased stake in the biopharmaceutical of
41,167,857 shares, including 161,500 shares
underlying exercisable options held di-
rectly by representatives of Baker Broth-
ers who serve on Acadia’s board. The in-
creased stake resulted from the purchase
of 1,562,500 shares at $40 apiece through
a Sept. 18 public offering. No specifics
were cited for the purchase, and Baker
Brothers’ total interest in Acadia now
stands at 27.1% of the outstanding stock.
Beacon Roofing Supply ( BECN )
Clayton Dubilier & Rice revealed that it
bought 3,207,200 shares of the roofing-
materials distributor through a block
purchase on Sept. 25. The shares were
acquired directly from Credit Suisse at a
price of $32.08 apiece and provide
Clayton Dubilier & Rice with a 30% stake
in Beacon Roofing Supply’s outstanding
stock, equal to 23,451,980 shares, which
includes 9,694,619 underlying convertible
preferred securities.
Clayton Dubilier & Rice’s acquisition
was the final one tied to an investment
agreement that capped its interest in Bea-
con Roofing. The agreement resulted from
Clayton Dubilier & Rice’s preferred secu-
rities investment in Beacon Roofing to as-
sist its $2.6 billion acquisition of Allied
Building Products that closed in January
Sunrun ( RUN )
Tiger Global Management revealed that
it has again lifted its ownership in the
solar-energy firm to 28,082,000 shares.
After disclosing the purchase earlier this
month, Tiger Global added another
2,025,949 shares with purchases from Sept.
12 through Sept. 24 at prices ranging from
$15.68 to $17.48. Tiger Global first disclosed
a 7.8% stake in Sunrun in late March 2018
and has steadily lifted its interest to 23.9%
of the outstanding stock.
Marchex ( MCHX )
Edenbrook Capital said it had picked up
a bigger stake in the mobile advertising
and analytics firm of 5,784,691 Class B
shares, equal to 15.1% interest in the B
stock. That amount includes 129,005
shares bought at prices ranging from
$3.20 to $3.32 apiece between Aug. 27 and
Sept. 25. Edenbrook said that after Mar-
chex’s second-quarter earnings report
and accompanying conference call, and af-
ter meeting with management, it believes
“the estimates of value” that it included
in a late 2018 13D filing and related letter
addressed to the company is “more
conservative than it previously believed.”
Decreases in Holdings
SemGroup ( SEMG )
Buffalo Investor disclosed on Sept. 19
that it slashed its holding of the petro-
leum-midstream-services company by
nearly 80% with its latest sales. From
Sept. 16 through Sept. 18, Buffalo sold a
total of 9,729,489 shares at prices of
$16.47 to $16.61 each. Buffalo gave no
reason for the divestment that now leaves
Buffalo with 2,654,411 shares, or a 3.4%
interest in SemGroup, including those
directly held by Buffalo Investor’s
founder.
But on Sept. 16 SemGroup announced
that it agreed to be acquired by Energy
Transfer (ET) in a $5.1 billion stock-and-
cash deal that values each share of Sem-
Group at $17. Buffalo first reported an
initial 15.7% stake in the energy-services
firm in July 2017, equal to 12.4 million
shares. In May, Buffalo switched to an ac-
tive stance as it engaged SemGroup’s
management to discuss “enhancing share-
holder value, including whether [Sem-
Group] has considered exploring strategic
alternatives.”
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The 13D Activist Fund, a mutual fund
run by an affiliate of the author and not
connected to Barron’s, has no position in
the securities mentioned here. In addi-
tion, the author publishes and sells 13D
research reports, whose buyers may
include representatives of participants in,
and targets of, shareholder activism.
The Activist Spotlight
Avid Technology (AVID)
Business: provider of an open, in-
tegrated media technology platform
Investor’s Average Cost: $7.77
Stock Market Value: $260 million
($6.24/share)
What’s Happening:Impactive
Capital entered into a confidentiality
agreement with the company.
Key Numbers:
8.51%: percentage of common
owned by Impactive
Nov. 30, 2019: termination date
of the confidentiality agreement
Behind the Scenes:Impactive
Capital is a new activist hedge fund
founded by Lauren Taylor Wolfe and
Christian Alejandro Asmar, both for-
merly of Blue Harbour. Impactive will
use all of the traditional operational,
financial, and strategic tools of activ-
ists, but will also implement environ-
mental, social, and governance, or
ESG, changes they believe can drive
shareholder value. Avid has had sev-
eral activists engage it in the past,
two of whom remain on the board.
ESG improvements are already
under way at Avid. The company is
switching from a staggered board to
a unitary one, and in February 2018,
Avid Chief Executive Officer Louis
Hernandez Jr. was terminated be-
cause of “violations of company poli-
cies related to workplace conduct,”
with the new CEO stating that the
company is committed to “providing a
workplace that’s welcoming, inclusive,
and respectful.”
The company is also transforming
its business model from a perpetual
license business to a subscription-
based model. Impactive has experi-
ence with strategies like this, which
often lead to lower Ebitda and reve-
nue in the short term, but increased,
more predictable, and more stable
revenue and cash flow in the long
term. Impactive Capital should be
helpful in navigating these changes,
potentially from the board level.
—KENNETHSQUIRE