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 Dec. 5 through Dec. 11, 2019. Source: InsiderScore.com
SCW Capital Management and Hoak Fund Management reported the ownership of a respective 1,909,397 and 736,018 shares of the coated-paper manufacturer, a combined total of 2,645,415 shares, equal to 7.6% of the outstanding stock.
On Dec. 10, SCW Capital Management, with the support of Hoak Fund Management, addressed a letter to Verso’s board, referencing its previous letter from May that cited its concerned about the board’s “lack of alignment with shareholders” and its “inability to articulate and execute on a consistent strategy with regards to capital allocation.” As SCW believes that these concerns have not been resolved, it will vote its shares against the current board and “in favor of the Atlas Holdings and Blue Wolf Capital nominees.”
SCW commended the pair’s “industry credentials, including a track record of success in creating value within the manufacturing sector” and concluded that supporting the slate of nominees chosen by Atlas and Blue Wolf “better positions Verso to increase shareholder value in [its] view.”
Original Filings
Amtech
Systems (ASYS)
Harbert Management revealed a new position in the electronics capital-equipment maker of 735,916 shares. That amount included the recent purchase of 67,964 shares at prices ranging from $5.72 to $6.02 apiece during the period of Nov. 21 through Dec. 9.
Harbert Management has no plans or proposals at this time, but did reveal that it has, and will probably continue to have, discussions with Amtech and other interested parties covering a range of topics.
Increases in Holdings
ViacomCBS
(VIAC)
Gamco Investors
(GBL) disclosed an increased position in the newly merged media and entertainment company of 5,375,384 shares, equal to 10.3% of the tradable stock. The higher stake resulted from the net addition of 7,300 shares of CBS Class A shares (former CBS) during the span of Nov. 20 to Nov. 27 at prices of $43.54 to $44.15 apiece and the purchase of 1,083 shares of the combined ViacomCBS on Dec. 6 at prices ranging from $42.78 to $43.27 each.
CBS and Viacom officially closed their $12 billion merger on Dec. 5.
Trinity Industries (TRN)
ValueAct Capital lifted its interest in the transportation and construction firm to 20.3%. ValueAct Capital bought a total of 678,300 shares on Nov. 11 through Dec. 6 at prices ranging from $21 to $21.63 each, bringing its total holding to 24,889,998 shares.
Without providing other details, ValueAct Capital also disclosed that it has adopted a 10b5-1 trading plan on Dec. 6.
Fang Holdings (SFUN)
General Atlantic Partners disclosed a higher stake in the China-based online real estate services provider of 11,106,442 American depositary receipts, which is equivalent to an equal number of ordinary shares.
General Atlantic Partners bought 920,000 shares from Nov. 21 through Dec. 6 at per share prices of $1.92 to $2, capping its earlier purchase of slightly more than 700,000 shares, which was disclosed last month.
General Atlantic Partners is the largest shareholder of Fang Holdings and now holds a 17% interest in the company.
GTT Communications
(GTT)
Spruce House Investments raised its position in the network and communication services firm to 15,086,167 shares, or 26.6% of the tradable stock.
The holding includes 11,167 shares of restricted stock held by Spruce House Investments co-founder Benjamin Stein, who serves on GTT Communications’s board. Citing only that it acquired additional shares “for investment purposes,” Spruce House bought 1,130,000 shares during the three days of Dec. 3 through Dec. 5 at prices ranging from $8.38 to $10.06 each.
CBL & Associates
Properties (CBL)
Exeter Capital Investors revealed that it held 11,350,000 shares of the commercial property REIT. That amount accounts for 1,000,000 shares purchased on Dec. 4 at a cost of $1.04 per share.
No reason was provided for the investment, which now gives Exeter Capital an approximate 6.5% interest in CBL & Associates.
Molecular Templates (MTEM)
Longitude Capital Partners reported a greater stake in the clinical-stage biotech of 5,647,302 shares, after it bought 937,500 shares on Nov. 25. Those shares were bought through Molecular Templates’ public offering at $8 apiece and gives Longitude a 12.5% stake in the company.
Decreases in Holdings
Potbelly (PBPB)
Privet Fund lowered its exposure to the casual sandwich shop operator to 1,116,905 shares. Without disclosing a reason, Privet sold 347,441 shares during the period of Nov. 5 through Dec. 6 at per share prices of $4.38 to $5.04, leaving Privet with a 4.7% interest in Potbelly’s outstanding stock.
Dicerna Pharmaceuticals (DRNA)
Bain Capital Life Sciences, a wholly owned subsidiary of Bain Capital, slashed its holding of the RNA-focused biopharmaceutical company through a Rule 144 sale of 1,500,000 shares on Dec. 4 at $24.68 each.
The transaction cut slightly more than a quarter of Life Science’s stake in the pharmaceutical firm and leaves it retaining 4,080,237 shares, equal to 6% of the outstanding stock.
The Activist Spotlight
Instructure
(ticker: INST)
Business: provides software applications for learning, assessment, and performance
Investor’s Average Cost: $43.98/share
Stock Market Value: $1.8 billion ($48.28/share)
What’s Happening: Rivulet Capital is opposing the recently announced deal to sell the company to private equity firm Thoma Bravo.
Key Numbers:
$47.60: the per share value for which the Instructure board agreed to sell the company to Thoma Bravo
$52.96: the closing price of Instructure’s stock on the day before the deal was announced
$230 million: The Canvas unit’s estimated 2019 revenue, versus $16 million estimated for the Bridge unit
$50 to $55 million: Canvas’ estimated 2019 Ebitda, versus a loss of $60 million to $65 million for Bridge
Behind the Scenes: Rivulet is not an activist investor, and this is its first 13D filing. Rivulet takes issue with the board’s three-week strategic-alternatives process and 35-day go-shop, which it believes are rushed and designed by management to result in a sale to a chosen buyer at a low price in order to save their jobs and enrich themselves. Rivulet says the board has a fiduciary duty to shareholders that requires a fair, open, and comprehensive sale process. Praesidium Investment Management (7.5%) also opposes the Thoma Bravo acquisition and has urged the board to separate the profitable Canvas educational software business from the unprofitable Bridge corporate software unit. Instructure has responded that, after engaging 19 companies, the board, including independent directors, believes that the acquisition is in the stockholders’ best interest, and it will continue to solicit better offers during the go-shop period.
–Kenneth Squire
The 13D Activist Fund, a mutual fund run by an affiliate of the author and not connected to Barron’s, has a long position in Infrastructure’s stock. In addition, the author publishes and sells 13D research reports, whose buyers may include representatives of participants in, and targets of, shareholder activism.
Email: [email protected]
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