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Top activist investing news and ideas --
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NEW TARGET: Voce Capital claims misuse of corporate assets utilization by Argo Group CEO. The CEO, Mark Watson, is using company assets to support his own lifestyle and hobbies, Voce owns a 5.8% stake and says as it prepares a proxy fight -- with the intent to nominate four directors for the board. Voce says Watson's use of the company jet and sponsoring race-car and sailing teams are not justified. “Exotic race cars and yachts have nothing to do with the rather humdrum business of selling insurance to small and midsize companies,” says Voce. Argo’s ROE averages less than 6% a year over the past decade, while its peers averaged almost 11% over the same period, Voce argues -- with the unjustified expenses are weighing on Argo.
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ICAHN and CAESARS: Carl Ichan could get the final say in who will be the next CEO of Caesars Entertainment Corp. Ichan owns roughly 10% and may also get board representation as part of the potential settlement between the two.
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ACTIVISM IN THE OIL PATCH: Shareholder activism will be on the rise in the US shale scene. This comes as many producers are seeing weak returns. Activists are stepping in to rein in expenses and CEOs. Activist investor Fir Tree Partners has called for Halcon to appoint independent board directors, cut costs and sell itself. Kimmeridge Energy has a new activist stake in PDC Energy, urging for the cutting of expenses and a dividend. Such battles are likely to “be pretty steady in 2019,” said Leo Mariani, KeyBanc Capital analyst. “The common complaint from activist investors is that a lot of these companies have relatively poor returns on capital and outspend cash flow.”
Must reads --
- The Lesson Of The Kraft Heinz Nosedive: Radical Cost-Cutting Is Out, Brands Are Back [link]
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