Hedge funds are betting that commodities trader Glencore will succeed in its battle for miner Xstrata, in a long-running deal that has been profitable for arbitrageurs and is still attracting funds looking to make money.
Arbs, hungry for action after a lean period for M&A, have been buzzing around the deal for months, attracted by its size, liquidity and complexity, and many profited from last week’s move by Glencore(GLEN.L) to sweeten its now 23 billion pound all-share bid.
Reported by Laurence Fletcher and Sophie Sassard, Reuters, Xstrata (XTA.L) was expected to recommend the offer as early as next week, although Qatar Holding – its second-biggest investor after Glencore – has yet to make its decision public.
However, after a breakthrough in talks last week, brokered by former British prime minister Tony Blair, many funds believe it is only a matter of time before the deal gets the Qataris’ stamp of approval.
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Tagged banks, Britain, Economy, England, engloand, Europe, financial markets, Glencore-Xstrata, Global Economy, Hedge Funds, investment, investment bank, investment portfolio, Modern Finance Report, tony blair, UK, united kingdom
Activist investment fund Starboard Value grabbed a 13.3 percent stake in Office Depot Monday and laid out a series of changes the office products retailer can implement in order to become a more profitable company.
In a letter to Office Depot’s board, Starboard said it believes the retailer is “deeply undervalued” and a “substantial opportunity” now exists for the company to improve its performance andvaluation.
Reported by Roland Jones, NBC News, Starboard’s stock purchase makes it Office Depot’s largest common shareholder. It follows a number of similar bids by investors to boost the value of besieged bricks-and-mortar retailers.
Starboard, which is known for targeting smaller companies it thinks are undervalued, recently launched a campaign to revitalize former Internet giant AOL, pushing the company to change its strategy.
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Tagged Economy, financial markets, Global Economy, Hedge Fund conference, hedge fund research, Hedge Funds, investment, investment bank, Modern Finance Report, office depot, starboard value
Billionaire John Paulson raised his stake in an exchange-traded fund tracking the price of gold while selling other stocks during the second quarter, leaving his $21 billion hedge fund with more than 44 percent of its U.S. traded equities tied to bullion.
Reported by Miles Weiss and Kelly Bit, Bloomberg News, Paulson & Co. purchased an additional 4.53 million shares of the SPDR Gold Trust, the firm’s largest position, and bought more shares of NovaGold Resources Inc. (NG), according to a Form 13F filed yesterday with the U.S. Securities and Exchange Commission. Gold prices posted their biggest declines since 2008 last quarter.
While Paulson trimmed his stake in AngloGold Ashanti Ltd. (ANG) and Gold Fields Ltd. (GFI), sales of energy, financial and auto-parts stocks boosted the relative weighting of gold-related securities in his U.S. stock portfolio to the highest in three years. That’s making the fund more vulnerable to declines in the price of bullion as the hedge-fund manager struggles to reverse record losses last year.
Posted in Breaking news, Commodities, Derivatives, Economy, emerging market, Equity Markets, Events, Hedge Funds
Tagged antigold ashanti, Economy, financial markets, Global Economy, Gold, Hedge Funds, investment, investment bank, John Paulson, Modern Finance Report, Paulson & Co.