Another day, another settlement with a hedge fund activist. In today’s saga, Viavi Solutions — the communications equipment company known as JDS Uniphase until this past August — agreed to name Donald Colvin and Tor Braham to its board of directors as part of a wider agreement with New York-based activist hedge fund firm Sandell Asset Management, which owns 5.1 percent of the shares. They will be nominated at the 2015 annual meeting.
The pair will also join two others on the re-purposed corporate development committee, which will review various strategies with the hope of boosting the company’s value, including a review of the business, financial position, capital allocation, investment and business strategies, and strategies to maximize the value of the company’s deferred tax assets. The committee will also retain an investment bank to help assess the company’s internal expense and operational structure.
Under the settlement, Viavi Solutions also will resume its previously announced $100 million share repurchase program, which has $40 million in total proceeds remaining. The company has also agreed to propose a new equity compensation plan based on stock price appreciation adjusted for share repurchases and dividends.
Colvin previously served as chief financial officer of Caesars Entertainment Corporation and executive vice president and CFO of ON Semiconductor. Braham was a managing director and global head of technology, mergers and acquisitions for Deutsche Bank Securities. He previously worked at Credit Suisse First Boston and UBS Securities.
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The U.S. dollar shares of Horseman Global surged 5 percent in September and are now up more than 23 percent for the year. The long-short equity fund, managed by London-based Horseman Capital Management, entered September 50.84 percent net short equities and 48.35 percent net long bonds.
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Edward Lampert has once again personally bought shares of one of his and his firm’s holdings. The founder of Bay Harbor, Florida-based ESL Partners bought more than 1.3 million shares of Sears Holdings between August 20 and September 30. Most of the shares were purchased on the open market, while the rest were the result of a grant of shares under previously agreed-upon arrangements. As a result of the transactions, Lampert owns more than 36.3 million shares, including nearly 30 million shares he owns outright and more than 6.3 million shares that he has the right to acquire within 60 days related to warrants that he holds. Shares of Sears surged nearly 6 percent on the news to $23.95. However, they are still down about 30 percent for the year. The Sears purchases were disclosed one day after Lampert revealed he bought more than 460,000 shares of Sears spinoff Lands’ End in the open market for a little less than $27 per share. Altogether he owns 9.24 million shares.
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Shares of Tiger Cub favorite Illumina tumbled 10.6 percent on Thursday after Leerink Partners, a New York-based boutique investment bank specializing in healthcare, downgraded the provider of genetic sequencing and array-based services to “Outperform” from “Market Perform” and cut its target price from $225 to $185. The company lacks “meaningful upside growth catalysts over the next year,” according to the report, cited by insidermonkey.com.
Two of llumina’s largest shareholders at the end of the second quarter were Greenwich-Connecticut-based Tiger Cubs: Lone Pine Capital and Viking Global Investors. In fact, the stock became Lone Pine’s third-largest long position in its long-short funds after the firm nearly doubled its stake, while the stock is Viking’s sixth-largest long even after cutting its stake by more than 40 percent. The stock was its best performing long in the second quarter.
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Quant giant Two Sigma named Alfred Spector as chief technology officer and head of the engineering division at the $28 billion in assets firm. He will lead the New York company’s technology strategy, focusing on “driving innovation to optimize Two Sigma’s investment platform and overall capabilities,” according to the firm’s announcement. For eight years, he was vice president of research and special initiatives at Google. He was also responsible for Google’s open-source initiatives, university-relations programs, and other technology initiatives. Before joining Google, Spector held a number of senior-level positions at IBM.
