Barron\'s - April 6 2020

April 6, 2020 BARRON’S M7

INSIDE SCOOP

Insiders at

building-supplies

firms HD Supply

and GMS have

beenbuying

millions of dollars

of stock as recent

market volatility

continues.

shares, inclusive of 4,189,446 un-

derlying forward purchase con-

tracts. Pershing’s higher stake re-

sulted from its $500 million

purchase of 10 million shares

through a March 27 private place-

ment, done in conjunction with

Howard Hughes’ stock offering

that day at $50 per share. Pershing

now holds a $29.8% interest in the

firm.

Lindblad Expeditions

Holdings (LIND)

ValueAct Capital , after reporting

that it had bought 1.2 million shares

earlier last month, bought once

again on March 17. On that day,

ValueAct purchased 50,000 shares

of the expedition and adventure-

travel firm at $4.05 apiece, giving it

an interest of 9.9%, equal to

4,923,247 shares. On March 25, a

ValueAct associate was appointed

to Lindblad’s board.

Decreases

In Holdings

Apogee Enterprises

(APOG)

Engaged Capital reduced its posi-

tion in the commercial-glass manu-

facturer to 1,311,888 shares, equal

to 4.9% of the tradable stock. With-

out citing a reason, Engaged sold

238,000 shares at prices ranging

from $14.83 to $21.02, from March

17 through March 26. In January,

Engaged appointed three represen-

tatives on Apogee’s board, as a re-

sult of a cooperation agreement

between the two firms enacted in

November. Ittook effect after Apo-

gee’s shareholder meeting in mid-

January of this year.

Colliers International

Group (CIGI)

Spruce House Investment low-

ered its investment in the provider

of commercial real-estate services to

5,725,143 shares, excluding a modest

amount directly owned by Spruce

House management. “Based on

[Spruce House’s] portfolio-manage-

ment program,” it sold 260,100

shares on March 20 at $46.47

apiece. Spruce House still owns

14.9% of the outstanding stock.

Activist Holdings

Red Robin Gourmet Burger

(RRGB)

Vintage Capital reported a stake

in the casual-dining chain of 1.5

million shares, equal to 11.6% of

the outstanding stock. Vintage

Capital and Red Robin entered a

cooperation agreement on March

26 that provided Vintage Capital

with one appointment to Red

Robin’s board. Furthermore, Vin-

tage Capital and its affiliates are

now allowed to own, in aggregate,

up to 20% of Red Robin’s out-

standing stock. In turn, Vintage

Capital will adhere to customary

standstill agreements and withdraw

its initial push to add four directors

to the board.

The agreement will be in place for

five years or until Vintage Capital’s

interest in Red Robin drops below its

current level of 11.6%.

Increases

In Holdings

Howard Hughes (HHC)

Pershing Square lifted its holding of

the real estate developer to 16,386,835

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 March 19 through

March 25, 2020.

Source: Insider-

Score.com

POWER PLAY

ConstructionSuppliers

SeeBigInsiderStockBuys

T

he coronavirus pandemic

has shaken the foundation

of an early 2020 rally in

housing stocks, but board

members at two building-

supply and construction

companies have spent

millions of dollars buying their beaten-

down shares on the open market.

HD Supply (ticker: HDS) and GMS

(GMS) shares have slumped about 30%

and 42%, respectively, in 2020.

Lauren Taylor Wolfe, an HD Supply

director, paid $8.6 million from March

19 through 23 for 314,118 shares—an

average price of $27.44. Wolfe, who

joined the board in 2017, made the

purchases through Impactive Capital,

the investment firm that she co-

founded and of which she is a

managing partner. Impactive now

owns 914,118 HD Supply shares.

Wolfe’s Impactive previously had

purchased HD Supply stock in

September 2019, when it paid $23.1

million for 600,000 shares, an average

price of $38.55.

GMS director Ronald R. Ross paid

$3.5 million from March 23 through 27

for 249,023 shares, an average price of

$13.94. He now owns 440,592 shares.

Ross joined the company’s board in

2014, and serves as chairman of SRS

Distribution, a roofing distributor. His

previous open-market purchase of

GMS stock had been in December

2018, when he paid $3.1 million for

200,000 shares, an average price of

$15.64 a share.

HD Supply on March 30 said that

market conditions would delay its

planned separation into two compa-

nies, one focused on the facilities-main-

tenance business, and the other, on

construction-and-industrial, or C&I,

operations.B

By ED LIN

Round2:

Mack-Cali

StrikesBack

T

he coronavirus pandemic has

put some proxy battles on

ice, but the duel between

real-estate investment trust

Mack-Cali Realty and activist in-

vestor Bow Street is only heating up.

Earlier this week,Mack-Cali

(ticker: CLI) announced that it

doesn’t plan to renominate four

Bow Street–nominated directors to

its board at its June shareholder

meeting. The New Jersey–based

REIT claimed the four, who joined

after a proxy contest with Bow

Street last year, “sought to advance

Bow Street’s self-interested agenda,”

which it claims includes a “fire sale”

of the company’s properties.

Bow Street denied that it’s seek-

ing a fire sale and said that by not

re-electing the directors,Mack-Cali

is showing a “blatant disregard for

even the most basic principles of

corporate governance.”

The battle comes during a diffi-

cult time for REITs. Last week,

Evercore downgradedMack-Cali

and Vornado Realty Trust (VNO)

to In Line amid “significant disrup-

tion” to the office-REIT sector dur-

ing the pandemic. Shares ofMack-

Cali are down nearly 40% this

year, while the S&P 500 is down

roughly 20%.

Evercore hadexpectedMack-

Cali to sell its suburban-office port-

folio over the next year but now

finds it “hard to believe this timing

could still beon track.”

Mack-Cali says Bow Street’s

campaign appears “tone deaf,” eat-

ing up time and energy that should

be used to manage the REIT

through the outbreak. Bow Street

counters thatMack-Cali’s moves on

the board make it clear why change

is needed and its CEO needs to go.

This is the second round be-

tween the two—and we don’t see

this fight winding down soon.B

By CARLETON ENGLISH