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Tibco Software Inc. (TIBX): Eminence Capital Raises Stake by 66% Amidst Buyout Talks

Ricky Sandler’s Eminence Capital disclosed yesterday, with the SEC, a 66% increase in its stake in Tibco Software Inc. (NASDAQ:TIBX). The fund now owns 8.81 million shares of Common Stock (up from 5.28 million declared in its latest 13F), which represent 5.4% of the company’s shares outstanding.

Eminence Capital is a New York-based hedge fund that was founded by Ricky Sandler in 1998, and managed by him ever since. Mr. Sandler started his career in 1991 as a research analyst at Mark Asset Management, and at the age of 25, he started Fusion Partners with Wayne Cooperman. Since inception Eminence Capital has achieved close to a 13% net annual compounded return.

Ricky Sandler

The increase in the fund’s position in Tibco Software Inc. (NASDAQ:TIBX) came on the date –September 29- on which the company made public its intentions of being bought by Vista Equity Partners for about $4.3 billion, in the biggest technology buyout in the U.S. this year. Stockholders would get $24 in cash a share, which meant that they would receive a premium of more than 20% for their stock (in relation to the closing price of the previous trading session: $19.51 per share). However, the company’s Board of Directors is being investigated by Shareholder Rights Law Firm Johnson & Weaver, LLP. The firm is trying to determine if members of the Board have breached their fiduciary duties in connection with the planned sale.

Eminence Capital’s stake makes it, by far, the largest institutional shareholder –amongst those we track- at Tibco Software Inc. (NASDAQ:TIBX). Another major fund betting on this $3.82 billion market cap provider of middleware and infrastructure software is George Soros’ Soros Fund Management. The fund last disclosed (by the end of the second quarter of 2014) a 109% raise in its exposure to the company, and now owns 5.78 million shares. In addition, Soros Fund Management owns more than 308 million Tibco Software Inc. (NASDAQ:TIBX) bonds, worth more than $313 million. Yet another prominent investor is Jeffrey Smith of Starboard Value LP, who started a position, with 4.3 million shares, over the second quarter of the year.

As mentioned above, Eminence Capital has returned about 13% per year since inception, so trailing its picks is not a bad idea. In fact, his top stock pick for the second quarter was another software company: Autodesk, Inc. (NASDAQ:ADSK). Autodesk has outperformed the S&P 500 (INDEXSP:.INX) -which has returned 4.14% year-to-date- and the NASDAQ Composite (INDEXNASDAQ:.IXIC) -which surged just 3.6%- gaining 8.63% since the beginning of the year.

Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned

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