JANA Partners, led by Barry Rosenstein, has disclosed in a newly amended filing with the SEC that it has reduced its position in URS Corp (NYSE:URS) to some 6.75 million shares, from 7.29 million disclosed earlier. The fund has sold around 543,000 shares at an average price of $46.23 per unit, the filing stated. Following the decrease, the activist stake amasses 9.4% of the company’s common stock, edging down from 9.7%.
Moreover, according to a press release attached to the filing, JANA Partners signed an agreement with URS Corp (NYSE:URS), under the terms of which, URS Corp will add four new independent directors, effective March 27. The new directors are: Diane C. Creel, William H. Schumann, III, David N. Siegel and V. Paul Unruh. Following the increase, the board of URS will consist of 14 members. The parties also agreed that URS will recommend the stockholders to vote for JANA’s nominees and “will recommend that the stockholders of the Issuer vote to elect the JANA Nominees at the 2014 Annual Meeting.”
At the same time, the agreement states that URS Corp (NYSE:URS) will form a Value Creation Committee, consisting of four members (two of which will be from newly appointed directors), which will analyze the company’s business and find solutions that will increase the shareholder value, like engaging an investment bank to conduct a strategic review of the company.
JANA partners went activist on URS Corp (NYSE:URS) earlier in February, after adding 100,000 shares to its position in February. The fund reported that it intends to enter into discussions with the company’s management regarding potential moves that can increase the value for shareholders. The stock of URS has been declining amid disappointing results for the fourth quarter of 2013 and guidance for 2014 that is below the consensus estimates.
As we stated in an earlier article, URS Corp, last year said that by 2015, it plans to buy back stock and pay out dividends in the total amount of $500 million, which will be taken from its free cash flow. Taking into account that the company will pay around $60 million in dividend payments per year, the share repurchase would amount to around $380 million (11% of the market cap). With the largest amount of the shares bought back this year, the next year EPS should increase considerably.
Moreover, several significant investors have boosted their positions in URS Corp (NYSE:URS), as showed the latest round of 13F filings. For example, David Einhorn‘s Greenlight Capital, raised its stake by 16% to nearly 1.3 million shares. Richard S. Pzena’s Pzena Investment Management, added 3% to its stake and now holds 1.1 million shares, and Clifton S. Robbins’ Blue Harbour Group has disclosed a new stake in the company, which amasses around 1.1 million shares and accounts to almost 4% of its equity portfolio.