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Harbinger Group Inc (HRG): Leucadia National Corp. (LUK) Boosts Stake by 12% as CEO Phil Falcone Steps Down and Joseph Steinberg is Appointed Chairman

Ian Cumming and Joseph Steinberg’s Leucadia National Corp. (NYSE:LUK) disclosed a 12% increase in its exposure to Harbinger Group Inc (NYSE:HRG). According to a Schedule 13D form, Leucadia entered into a Stock Purchase Agreement with Harbinger, pursuant to which the former bought 5 million shares of Common Stock at a price of $12.90 per share. Leucadia now owns 46.63 million shares, which represent 23.2% of Harbinger’s shares outstanding. In addition, Joseph Steinberg, Chairman of Leucadia, who has been serving as a Director at Harbiger since July 1, 2014, was now appointed Chairman of the Board of the Company, effective as of December 1, 2014.


Leucadia National Corp. (NYSE:LUK) is a $8.76 billion market cap diversified holding company that, through its subsidiaries, engages in mining and drilling services, telecommunications, healthcare services, manufacturing, banking, lending, real estate, and winery businesses. The company is sometimes called a “miniature Berkshire Hathaway” due to its wide and diversified holdings portfolio. Executives Ian Cumming and Joseph Steinberg each own over 10% of Leucadia, and their subsidiary, WMAC Investment, has strong ties to Bill Ackman’s Pershing Square. Leucadia also owns National Beef Packing Company, Jefferies, and has a joint ownership of Berkadia Commercial Mortgage with Berkshire Hathway itself.

For its part, Harbinger Group Inc (NYSE:HRG) is a $2.7 billion market cap holding company that provides consumer products including batteries, personal care products, household appliances, pet supplies, and home and garden pest control products, as well as life insurance and annuity products. Leucadia’s big stock purchase came right after Joseph Steinberg was appointed Chairman, following the resignation of famed investor Phil Falcone. Falcone also served as CEO at Harbinger Group Inc (NYSE:HRG); a search for someone to replace him at this position is still in progress.

According to an SEC filing, the shares bought by Leucadia (for an aggregate price of $64.5 million), came from Falcone’s hedge fund, Harbinger Capital Partners, which had disclosed ownership of 39.4 million shares by the end of the third quarter of 2014. In spite of this large stock sale, Harbinger Capital Partners remains as one of the largest institutional shareholders at Harbinger Group Inc (NYSE:HRG), along with Michael Novogratz’s Fortress Investment Group, which held 32.99 million shares as of September 30.

Leucadia had already –substantially- augmented its wage on Harbinger Group Inc (NYSE:HRG) this year. In early-July, it had disclosed upping its position from 18.6 million shares to 41.63 million shares. The fund is also bullish on HomeFed Corporation (OTCMKTS:HOFD), as it recently rose its stake to 9.97 million shares, from 9.46 million shares held previously.

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

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