13Ds are filed with the Securities and Exchange Commission within 10 days of an entity's attaining a 5% or more position in any class of a company's securities. Any subsequent change in holdings or intentions must be reported on an amended filing. This material has been extracted from filings released by the SEC from April 22 through 28.
Hedge fund Marathon Partners publicly disclosed results of a study it conducted on Dover, the No. 3 U.S. racetrack operator. The study, which was sent to Dover's directors, is the latest development in several years of governance-related cage-rattling by Marathon. The hedge fund has tried to persuade Dover to seek a buyer and to abandon its anti-takeover "poison-pill" strategy. "We believe this objective and thorough review confirms our position that [ Chairman Henry ] Tippie has not been performing his duties satisfactorily, and cannot be relied upon to do so in the future." Marathon argues that Dover has failed to create shareholder value, and that the poor performance centers on Tippie.
The fund is seeking to abolish the preferred status of Dover's supervoting Class A shares. Marathon insists that without the votes of Class A stockholders, Tippie wouldn't have been re-elected at the 2009 annual meeting. The fund has only submitted the proposal, not an alternate proxy, but noted in a strident December 2009 letter to the board that it would "continue to act as advocate for the long-forgotten shareholders." Marathon owns 3,184,590 shares (17.49% of the total outstanding).
Business : Wireless-phone systems and supply-chain software
Investor's Average Cost : $14.99 per share
Stock-Market Value : $114 million ($23.76 a share)
What's Happening : Discovery Group says that Tessco has poor corporate governance and executive-compensation practices, and recommends that it establish a committee of independent directors to evaluate strategic opportunities, hire an investment bank to evaluate takeover interest, eliminate the poison pill, declassify the board and adopt a majority-voting standard.
Key Numbers :
14.2% : percentage of Tessco's common stock owned by Discovery
34.1% : percentage of common owned by Tessco management
60.6% : percentage of nonmanagement shares voted in favor of eliminating the poison pill
Behind the Scenes : Discovery Group isn't an experienced activist investor. In its most recent proxy fight, with Tier Technology (TIER), it abandoned its fight for a cash payment and the acceleration of its stock options. Discovery has been a 13D filer in TESS for more than two years, during which it has withheld its votes for the election of certain directors. Discovery also has expressed its dismay with the adoption of a poison pill, an increase in the percentage of stockholders required to call a special meeting from 25% to 50% and Tessco's repurchase of shares owned by a potential strategic acquirer. Discovery submitted a proposal at the 2009 annual meeting to eliminate the shareholder-rights plan, but management's large ownership stake virtually assured defeat of the proposal. The same is likely to happen with Discovery's proposal to declassify the board. ________________________________________ This item is by 13D Monitor, a consulting firm specializing in shareholder activism and 13D filings. For a full report, go to www.13Dmonitor.com or call Ken Squire at 212-223-2282.
Phase Forward (PFWD)
Gamco Investors (NYS:GBL) (GBL) disclosed that it owns 3,148,794 shares (7.23%). The firm bought all of them on or after April 16, the day on which Phase Forward announced that it had agreed to be acquired by Oracle (NYS:ORCL) (ORCL) for $17 a share. The price represents a 30% premium over the closing price on the day before the buyout announcement was made.
Increases in Holdings
BigBand Networks (BBND)
ValueAct Capital 's stake rose to 6,357,162 shares (9.72%) after it bought 1,447,971 from March 24 to April 22, at prices ranging from $3.25 to $3.60.
Portec Rail Products (PRPX)
First Eagle Investment Management increased its holdings to 651,264 shares (6.78%), by purchasing 151,264 from April 5 to April 22 at $11.63 to $11.71 per share.
Decreases in Holdings
HealthPoint Capital Partners cut its position to 33,513,217 shares (38.4%), by selling 9,200,000 on April 21 at $4.75 a share. The sale was made pursuant to a joint offering by the company and by HealthPoint, priced to the public at $5 apiece.
LGB ENV decreased its ownership to zero, by selling its 10,437,249 shares from Feb. 26 to April 22 at $6 to $7.50 each. The fund announced its intention to sell the shares in a Feb. 26 filing.
Ramius Capital Group reduced its holdings to 4,229,300 shares (4.7%), after selling 999,679 from March 15 to April 23 at prices ranging from $2.94 to $3.60.
New York Times
Harbinger Capital Management decreased its holdings to 13,636,799 shares (9.43%), by selling 3,250,000 on April 20 to April 21 at $12.30 to $12.55 per share.
Questcor Pharmaceuticals (QCOR)
Italian investor Paolo Cavazza and his affiliates trimmed their holdings to 3,284,439 shares, selling 645,561 from March 16 to April 26 at prices ranging from $7 to $8.80.
Texas Industries (TXI)
Shamrock Activist Value Fund owns 14,182 shares (0.5%), after partners' redemption requests led it to distribute 2,826,556 shares in kind. Shamrock also made in-kind distributions of numerous shares it owned at Coinstar (NAS:CSTR) (CSTR), Arris Group (ARRS), Websense (WBSN) and Mobile Mini (MINI).