Investors were apparently taken by complete surprise when Keurig Green Mountain announced it will be acquired by private equity firm JAB Holding Company for $92 per share, or $13.9 billion. This is a 77.9 percent premium to the beverage company’s closing price on Friday. As a result, the stock surged 72 percent, to close at $88.89 on Monday.
This was great news for Ricky Sandler’s Eminence Capital. The New York hedge fund firm had more than tripled its stake in the company in the third quarter. Then, at the beginning of December, Eminence said it once again nearly tripled its stake from its position since the end of the quarter, to 10.66 million shares, bringing its total stake to 7.2 percent of the Waterbury, Vermont company that makes single-portion coffee brewing systems.
The big loser seems to be David Einhorn’s Greenlight Capital. Einhorn told investors in his third-quarter letter that he put on a short of the stock at an average price of $102.08. “The second time has been a charm,” the New York hedge fund firm gleefully stated in the letter. “So far, our third biggest winner this year.” However, even though the deal is being done for about $10 below the price Greenlight shorted the stock, Greenlight has already marked to market a huge gain on the stock when it reported its otherwise dismal results for the year. Through November, Greenlight is down more than 20 percent for the year. On November 30, Keurig closed at $52.40. So, when Greenlight reports December performance, it will reflect the huge surge in Keurig’s stock price when it calculates performance for its Keurig short. Yikes!
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On the other hand, Einhorn is no doubt glad he got out of long-time favorite Marvell Technology in the second quarter. Shares of the chipmaker fell another 1.50 percent on Monday after the company reported third-quarter earnings results that missed consensus forecasts. The stock is now down 31 percent since June 30. Phew!
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BlueMountain Capital Management raised its stake in Terraform Power by more than 40 percent, to nearly 9.2 million shares, or 11.5 percent of the SunEdison subsidiary that holds a portfolio of wind and solar assets. BlueMountain, a New York hedge fund firm, also changed the status of its investment from passive to activist, using a 13D form to report its latest position in the stock. Last week, David Tepper’s Short Hills, New Jersey-based Appaloosa Management disclosed it owns 9.25 percent of the shares of TerraForm and senior notes.
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Julian Robertson, Jr.’s New York-based Tiger Management boosted its stake in Enzymotec to more than 1.16 million shares, or 5.2 percent of the maker of nutritional ingredients and medical foods.
