Activist Investor ValueAct Hints at Plans for Baker Hughes -- Update
October 06 2015 - 9:33AM
Dow Jones News
By Lisa Beilfuss
ValueAct Capital Management on Tuesday hinted at its intentions
for Baker Hughes Inc., which is awaiting regulatory approval for a
tie-up with Halliburton Co., after the activist investor took a
roughly 5% stake in the oil-field servicer earlier this year.
In a regulatory filing, ValueAct said it believes shares are
undervalued and, as such, the firm intends to discuss with Baker
Hughes's board ways to enhance shareholder value--including
potentially adding a ValueAct representative to the company's
board. ValueAct said it would also discuss the company's mergers
and acquisitions strategy, executive compensation and capital
allocation, among other items.
ValueAct in its filing didn't mention Halliburton or the pending
merger. Shares of Baker Hughes closed Monday at $54.63, below the
$61.23 at which Halliburton's cash-and-stock offer valued
shares.
Representatives for Baker Hughes and ValueAct weren't
immediately available for comment.
In January, ValueAct disclosed a 5.1% stake in the Houston
company for about $1.22 billion. The position now stands at 5.3%.
When ValueAct first revealed its stake, it didn't indicate its
motives.
The investment came after Baker Hughes agreed to be acquired by
larger rival Halliburton for about $35 billion. Last month, the
companies unveiled further divestiture proposals to help complete
the deal.
ValueAct, a roughly $15 billion San Francisco hedge fund,
typically likes to work behind the scenes with management rather
than fight publicly like many activists. The firm garnered
attention in 2013 when it secured a board seat at Microsoft Corp.,
despite holding less than 1% of the stock, marking the first time
the software giant appointed an activist shareholder to its
board.
Other ValueAct targets include Motorola Solutions Inc., Adobe
Systems Inc. and CBRE Group Inc.
In early trading, shares in Baker Hughes were up 1.4% and
Halliburton shares rose 2.7% as crude-oil prices rose.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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(END) Dow Jones Newswires
October 06, 2015 10:18 ET (14:18 GMT)
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