Clint Carlson, Carlson Capital: Boise Inc. (NYSE:BZ) was recently upgraded in the equity portfolio of Clint Carlson‘s hedge fund Carlson Capital. The hedge fund recently disclosed ownership of over 6.7 million shares of Boise, which is equivalent to 6.7% of the company, and at the current price of company’s stock, the value of the stake amounts to $85.5 million. Through the recent transaction, Carlson Capital boosted its stake from the previously disclosed 1.2 million shares.
With the recent addition, Carlson became one of the largest shareholders of the company, and it now has more power to pursue the ideas it got for the development of Boise. According to a letter attached to the filing, Carlson’s plan involves the separation of Boise’s paper segment to create a spin-off company. The hedge fund also said that it will not participate in the tender offer initiated by Packaging Corporation of America (PCA), which offered the price of $12.55 per share. According to Carlson, the price for Boise’s shares stands between the $14 and $17 range.
“We believe that a business separation would better enable Boise to participate in industry consolidation in a way that benefits current stockholders and is also superior to the transaction being proposed by PCA. Our view has always been that Boise’s ownership of both Paper and Packaging assets is suboptimal and has severely limited the value it could create through consolidation. The market would likely punish Boise’s share price for acquiring even attractive assets in the Paper segment, and the Company’s paper exposure has likely limited the willingness of a pure-play packaging company to offer full value for Boise’s Packaging segment (“Boise Packaging”), which we view as the case with PCA’s proposal,” Carlson Capital said.
Aside from Carlson Capital, some other hedge funds disclosed ownership of Boise shares in the latest round of 13F filings. In line with Carlson Capital, John Paulson’s Paulson & Co is one of the largest shareholders of Boise owning almost 6.8 million shares. They are followed by Jim Simons’s Renaissance Technologies, and Aqr Capital Management, managed by Cliff Asness, which hold 974,000 shares and 772,400 shares respectively.
Check out Carlson’s full letter below: