Barron\'s - 09.03.2020

(National Geographic (Little) Kids) #1

March9,2020 BARRON’S M7


INSIDE SCOOP


Stephen Luczo is


the only Morgan


Stanley insider


who has been


buying stock


this year.


from $122.10 to $140 apiece, citing


no specifics for the fresh invest-


ment. In December 2019, Interna-


tional Flavors & Fragrances agreed


to merge withDuPont’s (DD)


Nutrition and Biosciences unit, a


segment valued at approximately


$26.2 billion.


Trinity Industries


(TRN)


ValueAct Capitallifted its interest


in the transportation and construc-


tion firm to 22.4%. ValueAct bought


a total of 1,219,113 shares from Jan.


29 to March 3 at prices ranging


from $20.41 to $21 each. The fresh


investment followed the previously


disclosed purchase of 723,509


shares in January, and now gives


ValueAct a total stake of 26,832,620


shares.


Decreases in


Holdings


Alector(ALEC)


OrbiMed Advisorsrevealed a


smaller investment in the clinical-


stage biopharmaceutical company


of 8,716,344 shares. Without citing


a reason, OrbiMed disclosed it sold


1,891,000 Alector shares, nearly


18% of its holdings, on March 2


through a block trade executed at


$26 apiece. It now owns 11.1% of


Alector’s outstanding stock.


Instructure(INST)


Praesidium Investment Manage-


mentrevealed a reduced interest of


5.7% in the cloud-based education


and professional-development ser-


vices firm. Praesidium sold 686,263


Instructure shares from Feb. 24


through Feb. 26 at an average per


share price of $48.76, leaving


Praesidium with 2,179,261 shares.


Thoma Bravohad approached


Instructure in December with an


offer to acquire the firm for $47.60


per share in cash. Instructure’s


board rejected that offer, but ap-


proved Thoma Bravo’s revised pro-


posal, a “best and final offer” that


was disclosed Feb. 14, that bumped


up the offer to $49 a share. The


revised tender offer for Instructure


shares expires at the end of March


20, unless extended or terminated.


Increases in


Holdings


Dave & Buster’s


Entertainment(PLAY)


Kohlberg Kravis Roberts(ticker:


KKR) increased its stake in the


casual-dining and entertainment


chain to 2,525,800 shares. KKR


added 587,324 shares from Feb. 26


to March 3 at per share prices


ranging from $29.93 to $37.34. KKR


noted that it had entered into a


derivative agreement with a third


party in the form of cash-settled


forward contracts, which adds ex-


posure to 1,345,493 additional Dave &


Buster’s shares. Including those con-


tracts and the open-market stock pur-


chases, KKR holds an overall interest


in Dave & Buster’s of 12.7%.


International Flavors &


Fragrances(IFF)


Winder Investmentincreased its


stake in the ingredient and additives


company to 22,665,059 shares, inclu-


sive of 927,193 tied to purchase con-


tracts. It now holds 21% of the trad-


able stock. Winder’s investment


includes 927,193 common shares


covered by purchase contracts. From


Dec. 27 to Feb. 25, Winder bought


1,343,809 shares at prices ranging


These disclosures are


from 13Ds filed with


the Securities and


Exchange Commission.


13Ds are filed within


10 days of an entity’s


attaining more than


5% in any class of a


company’s securities.


Subsequent changes


in holdings or inten-


tions must be re-


ported in amended


filings. This material is


from Feb. 27 through


March 4, 2020


Source:Insider-


Score.com


POWER PLAY


P


art of the gang that success-


fully pushed for changes at


BedBath&Beyondhas


found a new target.


Big Lots(BIG) is in the


crosshairs ofMacellum Advisors


andAncora Advisors, two of the


three hedge funds that went after


Bed Bath & Beyond (ticker: BBBY)


last year. The duo holds 11% of the


retailer’s stock and wants to re-


place the nine-member board. The


activists met with current Big Lots


directors, who acknowledged is-


sues facing the company but ex-


pressed reluctance to change the


current makeup of the board, ac-


cording to persons familiar with


the matter.


In an open letter, the activists


noted that Big Lots recently re-


ceived a “credible offer” from a


private-equity firm to buy the re-


tailer’s real estate in a $1 billion


sale-leaseback transaction. For


perspective, Big Lots’ market cap


was just below $700 million be-


fore the hedgies’ stake was re-


vealed, implying that outside of


the real estate, the company has


negative value. It also has roughly


$1.5 billion of debt.


Big Lots also made several “ill-


timed” capital-allocation decisions,


according to the activists, including


buying back more than $1 billion of


stock in recent years while shares


were falling, recently hitting an


intraday decade-low.


The activists may already have


Big Lots investors on their side.


The company rankled Wall Street


analysts by cancelling a March 9


investor day, and the stock rallied


on Friday after the activists’ letter


went public.


Big Lots acknowledged the let-


ter, and said it would have “further


such discussions” with the funds.B


Morgan Stanley’s Newest


Director Bought Up Stock


M


organ Stanley’s newest


director continues to


buy up shares of the


financial-services giant


on the open market.


Stephen Luczo, who


joined Morgan Stanley’s


(ticker: MS) board in October, first


bought shares after the company


announced that it agreed to buy


discount brokerE*Trade Financial


(ETFC). The Feb. 20 announcement


sent Morgan Stanley stock sliding


nearly 5%.


Morgan Stanley continued its fall


the next day, a Friday, when Luczo


paid $2.6 million for 50,000 shares,


an average price of $53 each,


according to a form he filed with the


Securities and Exchange Commission.


Since then, fears of the coronavirus


outbreak have sent the market—and


Morgan Stanley stock—sliding.


On Friday, Feb. 28, a week after his


earlier purchase, Luczo paid only $2.2


million for 50,000 shares, an average


per share price of $44.97. He made his


purchases through a trust that now


owns 171,000 Morgan Stanley shares,


and he holds an additional 3,122


shares in a personal account.


Luczo is chairman ofSeagate


Technology(STX), a maker of hard


drives.


Morgan Stanley declined to com-


ment and didn’t make Luczo available


for comment on his stock purchases.


Seagate didn’t respond to a request to


make Luczo available for comment.


Luczo is the only Morgan Stanley


insider who has been buying stock this


year. In 2019, the shares matched the


28.9% rise in the S&P 500 index. But


so far in 2020, the 18.2% drop in


Morgan Stanley’s stock is about twice


that of the index.B


By ED LIN


Big Lots


Targeted


for Changes


By Carleton English

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