Merger-Arb Guru Was Playing ExactTarget Inc (ET), Lufkin Industries, Inc. (LUFK) & More

EAC Partners was launched in 2003 by Mike Donatelli and six other partners. Before becoming a hedge fund manager, Donatelli gained his experience by working with merger arbitrage at George Soros’ fund, at UBS, and Steve Cohen’s SAC Capital.

Lufkin Industries, Inc. (NASDAQ:LUFK)In this way, EAC is involved with high-yield and distressed securities as a part of its strategy. Generally, hedge funds use a variety of strategies, each having something original implemented by hedge fund managers themselves. However, there are several strategies that can be called the basics, and we have compiled a list of six hedge fund strategies to put in your back pocket.

Let’s look at what this merger-arb guru has loved of late:

In first place is ExactTarget Inc (NYSE:ET), in which the hedge fund held 110,832 shares, worth $3.7 million. This was a new position in the EAC Partners’ 13F portfolio. In July, ExactTarget Inc (NYSE:ET) was acquired by salesforce.com, inc. (NYSE:CRM), the latter announcing a tender offer for acquiring all of the outstanding shares of ExactTarget Inc (NYSE:ET) for $33.75 per share.

The next on the list is another merged company, Lufkin Industries, Inc. (NASDAQ:LUFK), in which EAC disclosed a $1.3 million position, which contained 14,690 shares. Lufkin Industries, Inc. (NASDAQ:LUFK) was a new position during the second quarter of the year. At the beginning of July, Lufkin became a part of General Electric Company (NYSE:GE)‘s Oil and Gas division. The value of the deal amounted to more than $3 billion.

Another new position in the equity portfolio of EAC was NetSpend Holdings Inc (NASDAQ:NTSP), in which the hedge fund disclosed a $1.2 million stake, containing 77,600 shares. NetSpend Holdings Inc (NASDAQ:NTSP) was purchased by Total System Services, Inc. (NYSE:TSS) in the second quarter of the year.

In BMC Software, Inc. (NASDAQ:BMC), EAC Partners reported ownership of 23,168 shares, worth about $1.1 million. BMC Software, Inc. (NASDAQ:BMC) has gone private and was acquired by a group of investors including Bain Capital and Golden Gate Capital. The group acquired BMC Software, Inc. (NASDAQ:BMC) at a price of about $46.25 per share or $6.9 billion.

And the last on our list is Power One Inc (NASDAQ:PWER), another recent acquisition, in which Donatelli’s hedge fund owned 109,987 shares, worth $695,000. Last month, Power One Inc (NASDAQ:PWER) was acquired by Switzerland-based ABB Ltd (ADR) (NYSE:ABB).

In addition to EAC Partners, Jeffrey Smith’s Starboard Value, Van Schreiber’s Bennett Lawrence Management and Mario Gabelli’s GAMCO Investors are a few other hedge funds worth watching as 13F filings continue to roll in.

Disclosure: none

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