US billionaire activist shareholder Charles Brandes must be developing a taste for Irish cider as his firm boosted its stake in Bulmers maker C&C recently.
His company, Brandes Investment Partners and another US activist shareholder, Southeastern Asset Management, both increased their stakes in C&C in recent weeks, while another backer, Franklin Templeton cut its holding.
Ferrari-loving Mr Brandes’s firm disclosed this week that it increased its stake in the Irish cider maker to 7.02 per cent from 6.02 per cent.
The investor bought the shares on February 22nd, when C&C closed at €3.95 on the Irish Stock Exchange, valuing the tranche of 3.16 million equities at more than €12 million.
It previously bought into C&C for €3.67 and €3.90. The Irish company’s shares closed at €3.92 on the Dublin market on Friday, below the level at which Brandes bought its latest tranche, but ahead of the prices at which it purchased the other 6 per cent.
Unloved stocks
Brandes, based in San Diego, California, gave no reason for buying the shares, but the company focuses on “unloved” stocks in the belief that they will deliver long-term returns.
Its own stated approach is to buy companies selling at discounts to estimates of their true worth. Alongside this, Brandes has a reputation for working behind the scenes to push companies to pursue strategies it believes will help deliver value.
When it increased its stake to 6 per cent from 5 per cent last autumn, sources suggested C&C’s ability to generate cash and pay dividends drew the firm to the Irish company. It first bought into the drinks manufacturer 18 months ago.
Meanwhile it has emerged that Southeastern Asset Management, headquartered in Memphis, Tennessee, upped its holding in C&C to 15.05 per cent from 14.2 per cent earlier this month.
It bought 2.9 million shares on February 7th, valued at €11.45 million on the basis of the €3.95 closing prices. The purchase brought its total holding in C&C to 47.6 million shares.
Franklin Templeton
The day before Southeastern increased its stake, another backer, Franklin Templeton, offloaded close to 1 per cent of the company, also at about €3.95 a share, or €12 million, to cut its stake to 6.95 per cent from 7.89 per cent.
Southeastern takes a long-term view of the companies it backs. Its staff often invest alongside clients through its Longleaf Partners Funds.
It is prepared to criticise publicly the boards of the companies in which it invests. Southeastern was the biggest shareholder in Dell when the computer manufacturer’s founder, Michael Dell, moved to take it private in 2013. The investment company issued an open letter arguing that the special committee of Dell’s board overseeing the deal had undervalued the company and had failed to make a case for shareholders to accept the $13.65 offered for their stock. Investors finally received $13.75 per share.
