Billionaire Dan Loeb Bullish on Mergers and Acquisitions Players

Third Point Bullish on Time Warner Cable Inc. (NYSE:TWC) Ahead of Takeover Approval

– Number of shares held by Third Point as of December 31: 1.40 Million

– Value of Third Point’s holding as of December 31: $259.83 Million

Dan Loeb’s Third Point upped its stake in Time Warner Cable Inc. (NYSE:TWC) by 100,000 shares during the final quarter of 2015, ending the year with 1.40 million shares worth $259.83 million. In May 2015, Time Warner Cable and Charter Communications Inc. (NASDAQ:CHTR) sealed a merger agreement under which Charter will offer $100.00 in cash and shares of a new public parent company, to be called New Charter, equivalent to 0.5409 shares of CHTR for each share of Time Warner. Just recently, the U.S. Federal Communications Commission approved the multi-billion-dollar takeover of Time Warner Cable subject to several conditions aimed at enhancing competition among Internet service providers, as well as increasing the number of homes with high-speed broadband connection; the deal will create the nation’s second-largest cable provider. Third Point believes that the New Charter will enjoy substantial free cash flow per share growth due to “accelerated revenue growth, margin expansion, synergies, lower capital intensity, significant tax assets, and substantial share repurchases”. All in all, Charter’s share price could advance 25%-to-30% within two years according to Dan Loeb.

Third Point Discusses Freshly-Completed ACE Limited-Chubb Merger; Chubb Ltd (NYSE:CB)

– Number of shares held by Third Point as of December 31: 1.50 Million

– Value of Third Point’s holding as of December 31: $175.28 Million

Third Point LLC acquired a new stake of 1.50 million shares of ACE Limited during the fourth quarter of 2015, which was valued at $175.28 million on December 31. In the January of 2016, Swiss insurer ACE Limited completed its previously announced acquisition of Chubb for $62.93 in cash and 0.6019 shares of ACE stock, creating the world’s largest publicly-traded property and casualty insurance company called Chubb Ltd (NYSE:CB). Third Point considers Chubb as “a highly-quality compounder in the financials space, with double-digit earnings growth potential over the next few year”. “Chubb’s scale and focus on growth could not come at a better time as certain competitors scale back operations to satisfy shareholder demands”, said the New York-based hedge fund in its first-quarter letter to investors. The newly-completed combination is expected to achieve annual expense savings of roughly $650 million by 2018, but Dan Loeb and his team are “willing to forego short-term cost cuts or buybacks to own a franchise that is a long-term winner with the premier franchise in US high-net-worth insurance”. Beech Hill Partners, founded by Paul Cantor, Joseph Weiss, and Will Wurm, acquired a new stake of 3,800 shares of Chubb Ltd (NYSE:CB) during the March quarter.

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