SPX Corporation (SPW), Esterline Technologies Corporation (ESL): Activist Hedge Fund Relational Investor’s Latest Moves

Ralph V. Whitworth‘s Relational Investors continues its streak of trimming its activist stake in  SPX Corporation (NYSE:SPW), as the fund cut its stake by approximately 740,000 shares down to about 4.29 million shares, according to a recent filing with the Securities and Exchange Commission. Meanwhile, the fund also issued a filing to inform about the resignation of Mr. Henry W. (Jay) Winship, a principal of Relational Investors LLC on 11th March, from Esterline Technologies Corporation (NYSE:ESL)‘s board. Whitworth’s fund holds 2.48 million shares of Esterline valued at $271.85 million, as of the latest 13F filing.

 Ralph Whitworth is a well-known activist investor, who after acquiring a significant stake in the troubled companies jumps on their board. Rather than proxy fights he is more interested in engaging the board and management and resolve incompetencies surrounding their corporate governance. Backed by sound research, he will highlight the troubled spots of a company, but his refined style doesn’t entail arguing about strategy, or business plans. However, he will publicly hold the board and the CEO accountable for poor decisions including corporate compensation, acquisitions or corporate misconduct. Whitworth has now been battling throat cancer, and has taken a leave of absence while his fund continues to unwind some of his holdings, while not initiating any new positions. News about the fund’s dissolution plans also surfaced in November last year. The market value of Relational’s portfolio stood at $2.78 billion at the end of the fourth quarter, as compared to $4.06 billion a quarter earlier. With top 10 holdings constituting 98.97% of the portfolio value, the fund is not very big on diversity. Relational’s top two holdings remain Mondelez International Inc (NASDAQ:MDLZ) and Bunge Ltd (NYSE:BG).