Staples, Inc. (SPLS), Office Depot Inc (ODP) Down On Merger Fears: What Do Hedge Funds Think?

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. The aforementioned Renaissance Technologies, managed by Jim Simons, assembled the most valuable new position in Staples, Inc. (NASDAQ:SPLS), having $102.2 million invested in the company at the end of the first quarter. Richard Driehaus’ Driehaus Capital also made a $54.5 million investment in the stock during the quarter. The other funds with brand new Staples positions are Sander Gerber’s Hudson Bay Capital Management, Robert Pohly’s Samlyn Capital, and Carl Tiedemann and Michael Tiedemann’s TIG Advisors.

On the other side of the coin, we see Jeffrey Smith‘s Starboard Value LP also having a large position, the largest in fact, in Office Depot Inc (NYSE:ODP), worth close to $406.8 million, comprising 8.5% of its total 13F portfolio. The second-most bullish hedge fund manager is Pine River Capital Management, led by Brian Taylor, holding a $153.9 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions comprise Eric Mindich’s Eton Park Capital, and Matthew Halbower’s Pentwater Capital Management.

Specific money managers were confidently going long in Office Depot during the quarter as well. Eton Park Capital, managed by Eric Mindich, created the most valuable new position in Office Depot Inc (NYSE:ODP), having $148.6 million invested in the company at the end of the quarter. Matthew Halbower’s Pentwater Capital Management also initiated a $126 million position during the quarter. The following funds were also among the new Office Depot investors: Robert Emil Zoellner’s Alpine Associates, Joshua Friedman and Mitchell Julis’ Canyon Capital Advisors, and Thomas Steyer’s Farallon Capital.

Even though there are fears about the merger of these two companies, the significant bets being made by smart money in them make us conclude that Staples, Inc. (NASDAQ:SPLS) and Office Depot Inc (NYSE:ODP) are solid bets for investors with a taste for mergers.

Disclosure: None