Jack In the Box (ticker: JACK) which has been the target of two activist investors (Jana Partners and Blue Harbour Group, both having filed 13Ds) is putting it self up for sale according to Reuters. The stock was up 6% today on the sale rumors. One analyst speculated that if JACK sells for the same multiple as Sonic fast food (sold to Arby's parent Inspire Brands a few months ago at 16x trailing EBITDA) it would result in a $115 share price, a nearly 30% premium to today's closing price of $88.54 per share. He goes on to say that this would be on the higher end of a potential sale price.
See CNBC article here for more on the rumors.
Both Jana and Blue Harbour stated in their 13D filings (filed in February and November 2018 respectively) that they thought JACK was a undervalued or a good investment. Further they also mentioned they would be having strategic discussions with JACK board and management on ways to unlock shareholder value. It will be interesting to see how much JACK eventually gets sold for.
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Note that the writer of this post has a long position in JACK.
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This question is slightly broad. You can almost think of it like “do CEO’s create long term value?” some do and some definitely don’t. It depends on many things. Generally speaking most of the actions activist investors push for are to create value and with the exception of some actions, it is to create long term value. Pushing for the below are generally good for long term value:
Changing bad management/board
If one is focusing on an event-driven investment strategy (waiting for the activist's actions to be executed and then exiting once the stock price has appreciated), then the question of long term value creation for the purposes of investment strategy don't apply.
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Carl Icahn and his affiliates have accumulated 18.5 million shares (or 9.3%) of Dell Technologies (NYSE: DVMT) as of November 1, 2018.
Icahn's initial 13D filing was made on October 15th and shows his and his affiliates purchase price ranges between $93.47 and $97.65. DVMT closed at $92.10 on November 6th.
Icahn is currently in a legal battle to increase the merger consideration for shares of DVMT. Along with his 13D filing, Icahn released a letter to fellow shareholders emphatically arguing against the current merger agreement and claims the offer price significantly undervalues the company. You can read the full letter here where Icahn explains his view that the company is "on a pure mathematical basis approximately $144 per share" (with some assumptions made). We suggest you read the actual letter for the details.
Subscribers of 13D Alerts received the below alert when Icahn's 13D filing was made with the SEC:
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This post is not meant to be investment advice nor a recommendation to buy any stock, but rather for information and research purposes and to demonstrate our alert system. You should not rely on information in the post for investment decisions, but should do your own research. We don't currently have positions in Dell Technologies, however we may do more analysis and determine it is an attractive investment and purchase some shares in the near future.