Cerberus Discloses Large Activist Position in Blue Bird Corp (BLBD); Check Out the Fund’s Other Top Picks

Stephen Feinberg’s Cerberus Capital Management disclosed ownership of 12.0 million shares of Blue Bird Corp (NASDAQ:BLBD), in a filing with the SEC on Thursday, the date of event which required the filing being on February 24. The position represents a 60.8% stake in Blue Bird Corp, which was acquired by and merged with Hennessy Capital Acquisition Corp on February 24, with the newly-merged company retaining the former’s name.

Cerberus Capital Management, which was founded in 1992 and is managed by Feinberg, makes many of its investments in the private sector, as its investment in Blue Bird was. Hennessy purchased the school bus manufacturer for $427 million from The Traxis Group B.V, which is majority owned by funds affiliated with Cerberus. Cerberus does also have a small public equity portfolio, with the majority of its $1.10 billion portfolio invested in just one company (we’ll get to its top picks later in the article).

In addition to retaining a large stake in Blue Bird, Cerberus will also maintain a presence on the company’s Board of Directors, as Cerberus Operations’ CEO Chan Galbato will continue on as the non-executive Chairman of the Board, a position he held with Blue Bird since 2009. Traxis also entered into a letter agreements with both Hennessy and Coliseum Capital Management, stating that it will make no effort to directly or indirectly push for the removal of Daniel J. Hennessy or Adam Gray from the company’s board at any point before the company’s 2017 and 2016 shareholder meetings, respectively. Hennessy will function in the capacity of Vice Chairman of the new company.

In addition to being an industry leader in school bus production and innovation, Blue Bird is also a leader in building alternative fuel school buses that can run on propane or compressed natural gas. The position in Blue Bird, valued at $109.08 million, makes it Cerberus Capital’s second-most valuable public equity position based on its holdings at the end of 2014.