Swedish-Born Tom Sandell Focuses on Equity Special Events Opportunities

#3. Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT)

– Number of shares owned by Sandell as of March 31: 310,800

– Value of Sandell’s holding as of March 31: $25.93 Million

Sandell’s alternative asset management firm also added a 310,800-share position in Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT) to his portfolio during the first quarter of the year, which was valued at $25.93 million on March 31. The brand new position constituted 6.2% of Sandell’s $421 million-portfolio. In November 2015, Starwood and Marriott International Inc. (NASDAQ:MAR) sealed a merger agreement, which could create the largest hotel operator in the world based on room count. At closing, Starwood shareholders are set to receive 0.80 Marriott shares and $21.00 in cash for each share of Starwood. At current prices, each Starwood share would be worth $73.6, slightly below Starwood’s current price level. However, several hotel owners in Chicago and New York, namely the owner of Sheraton Grand Chicago and the owner of the Westin Times Square in New York, are challenging Marriott’s acquisition of Starwood in court, arguing that the merger would hurt their businesses. Daniel S. Och’s OZ Management reported owning 5.58 million shares of Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT) in its latest 13F.

#2. Yahoo! Inc. (NASDAQ:YHOO)

– Number of shares owned by Sandell as of March 31: 894,556

– Value of Sandell’s holding as of March 31: $32.93 Million

Tom Sandell and his team increased exposure to Yahoo! Inc. (NASDAQ:YHOO) by 506,000 shares during the first three months of 2016, ending the first quarter with 894,556 shares valued at $32.93 million. The updated stake accounted for 7.8% of Sandell’s entire portfolio on March 31. Yahoo!’s revenue for the first quarter of 2016 declined 11% year-on-year to $1.09 billion, partly owing to a significant decline in search revenue driven by a drop in Yahoo search traffic. The top-line figure was also impacted by an agreement with Mozilla Corporation reached in November 2014 to compensate Mozilla for making Yahoo! the default search provider in the United States. It appears that Yahoo! is having a hard time turning its business around, so a much-discussed sale of its Internet business seems imminent. The sale is imminent mainly because the strategic review committee formed earlier this year to explore strategic alternatives, which include a sale or a reverse spin-off of the company’s operating business, was recently joined by activist investor Jeffrey Smith of Starboard Value LP. The activist hedge fund owns 12.30 million shares of Yahoo! Inc. (NASDAQ:YHOO) as of March 31.

#1. Bob Evans Farms Inc. (NASDAQ:BOBE)

– Number of shares owned by Sandell as of March 31: 1.38 Million

– Value of Sandell’s holding as of March 31: $64.32 Million

Bob Evans Farms Inc. (NASDAQ:BOBE) was the largest equity holding in Sandell’s portfolio at the end of the March quarter, amassing 15.3% of the fund’s portfolio value. The New York-based asset manager trimmed its stake in Bob Evans Farms by 27,844 shares during the first quarter to 1.38 million shares, which were valued at $64.32 million on March 31. Sandell Asset Management has been pressuring the chain of 548 full-services Bob Evans restaurants to separate the packaged-foods units from the restaurant-chain business, but the fund’s desire hasn’t been fulfilled just yet. Thomas Sandell received four seats of the 12-member Board in August 2014, but the overhauled Board did not go for Mr. Sandell’s separation idea. Nonetheless, the revamped Board has undertaken various steps favored by the activist investor, which included the appointment of a new Chief Executive Officer, as well as an increase of stock buybacks and dividend payments. Shares of Bob Evans Farms have advanced 17% since the beginning of 2016. Rob Citrone’s Discovery Capital Management was the owner of 1.82 million shares of Bob Evans Farms Inc. (NASDAQ:BOBE) at the end of March.

Disclosure: None