As it has been mentioned earlier, two other companies in which Mr. Smith more than doubled Starboard’s stake during the fourth quarter are Family Dollar Stores, Inc. (NYSE:FDO) and Integrated Silicon Solution, Inc. (NASDAQ:ISSI). Even though the value of both positions is not even close to the largest holdings, both companies are still worth looking into.
In Family Dollar Stores, Inc. (NYSE:FDO), Starboard doubled its stake to 600,000 shares, valued at $47.53 million as of the end of 2014. The investor initiated a stake with 700,000 shares during the second quarter as the company has been in talks regarding a potential takeover from Dollar Tree, Inc. (NASDAQ:DLTR). Later on, as the deal stalled after a new offer from Dollar General Corp. (NYSE:DG), Starboard cut its stake to 300,000 shares (held as of the end of September). However, in January, shareholders of Family Dollar Stores, Inc. (NYSE:FDO) voted in favor of the merger with Dollar Tree, the value of the deal amounting to $8.50 billion. Family Dollar Stores, Inc. (NYSE:FDO) was put for sale after pressure from investors, including Carl Icahn who initiated a 10% stake in June and said that the company should merge with Dollar General. However, as the company entered into an agreement to merge with Dollar Tree, Mr. Icahn sold the largest part of his stake at a significant profit (around $150 million). The largest shareholder of Family Dollar among institutional investors is Nelson Peltz’s Trian Partners, which owns 8.37 million shares as of the end of 2014.
However, more interesting is the case of Integrated Silicon Solution, Inc. (NASDAQ:ISSI), since Starboard holds an activist stake in the company. In its latest 13F, the fund reported holding around 2.40 million shares, up by 182% on the quarter, valued at $39.75 million. Soon after initiating a stake, Starboard formed an activist group with Oliver Press and disclosed the intention of nominating a candidate to be elected to Integrated Silicon Solution, Inc. (NASDAQ:ISSI)’s board of directors. In December, the stockholder group disclosed a letter sent to Integrated Silicon Solution’s CEO Scott Howarth, in which they outlined that the stock is undervalued in relation to its peers and expressed their intention to nominate several candidates to be elected to the board of directors at the next annual meeting. Since Mr. Smith went activist on the producer of semiconductors for the autmotive and industrial markets the stock of the company gained over 10%. Among the funds that we track, aside from Starboard, the only fund that owns a notable position in Integrated Silicon Solution, Inc. (NASDAQ:ISSI) is Chuck Royce’s Royce & Associates with nearly 2.50 million shares.
Disclosure: none
