Papa John’s Strikes Deal with Starboard in Hopes of Ending Feud with Founder, But Schnatter Says He Had Rival Plan (CNBC)
Embattled pizza chain Papa John’s has struck a deal with activist hedge fund Starboard Value in what it hopes may bring an end to a rocky few months that included a public battle with its founder, John Schnatter. As part of the deal, Starboard will invest $200 million, which will bring Schnatter’s stake in Papa John’s down from roughly 30 percent to around 26 percent, according to a person familiar with the situation. It will also install Starboard Chief Executive Jeff Smith, known for his turnaround of Darden Restaurants, on the pizza chain’s board as chairman, giving it a powerful defense should Schnatter wish to launch a proxy battle or seek to overturn members of the Papa John’s board.
Here’s What Happens When a Hedge Fund’s Star Walks Away (Bloomberg)
Andrew Fredman hit the hedge-fund lottery. For a decade and a half, he made a fortune as the investment brains behind Fir Tree Capital Management. Then, at 53, he walked away. What happened next shows the vagaries of the hedge-fund business — and how quickly a hot hand can go cold when a star steps back.
Elliott Management Increases Passive Stake in Dell Technologies (Bloomberg)
Elliott Management Corp. has upped its stake in Dell Technologies Inc. and believes the company can increase its share price by taking actions including distributing its stake in VMware Inc., according to people familiar with the matter. The New York-based hedge fund, run by billionaire Paul Singer, increased its passive stake in Michael Dell’s technology giant to 9.6 million shares, or 5.6 percent, from about 6.3 million shares previously, according to a regulatory filing Monday.
Gannett Rejects Hostile Bid From Hedge Fund-Backed Group (The New York Times)
Gannett, the publisher of USA Today and more than 100 other newspapers across nearly three dozen states, rejected a hostile takeover bid from a hedge fund-backed newspaper group on Monday, kicking off a battle for shareholder votes to determine the future of the company. In a statement, Gannett’s board said it turned down a $1.3 billion buyout offer, or $12 per share, from MNG Enterprises, which is controlled by the New York hedge fund Alden Global Capital. It concluded that the “proposal undervalues Gannett and is not in the best interests of Gannett and its shareholders” and called it not “credible.”