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from Breakingviews:

Hertz gears up for another financial spin

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Carl Icahn is just the latest financier to toy with Hertz Global. The activist investor reported an 8.5 percent stake on Wednesday, saying he planned to pressure the $14 billion car rental company over recent management stumbles. But Hertz has been an investor plaything for nearly a century. Automakers, an airline, a 1960s conglomerate, private equity and public investors have all owned the business.

Launched in Chicago in 1918 and bought by its namesake, John Hertz, half a decade later, the car rental operation was swallowed up by General Motors in 1926, a decade before Icahn was born, according to a potted history on the company website. The billionaire activist was a spry 20-something when Hertz made its stock market debut in 1954, a year after being sold to bus-maker Omnibus Corp.

In 1967, it was broadcasting-to-carpets giant RCA’s turn at the wheel. As the stodgy old conglomerate was being dismantled in the 1980s, ownership passed to UAL, the parent company of United Airlines – part of an abortive attempt to diversify out of commercial air travel that also included owning hotels.

from Breakingviews:

Discounters’ $20 bln deal may spark M&A price war

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Discount retailer Dollar Tree’s $8.5 billion pounce on rival Family Dollar could spark an M&A price war. The companies have identified more than enough cost savings in their $20 billion union to cover the 23 percent premium to be paid to Carl Icahn and other Family Dollar investors. As a percentage of revenue, though, synergies are relatively low. That may leave room for sector giant Dollar General to lob in a bid.

from Breakingviews:

Sony brush-off won’t end Dan Loeb campaign

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The tussle over Sony may be the most courteous shareholder battle ever. Back in May, hedge fund manager Dan Loeb respectfully suggested the company spin off a stake in its entertainment arm. Now the Japanese group’s board has politely rejected the idea. But the activist appears to be digging in for the long haul.

from Breakingviews:

Dan Loeb‘s breakup plan deserves Sony’s ear

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Dan Loeb is taking Japan’s economic renaissance at face value: the hedge fund manager wants Sony to spin off its entertainment arm. Though activists rarely prevail in Japan, Loeb’s idea may have merits. The electronics giant should take him seriously.

from Breakingviews:

Replacing P&G boss may be Bill Ackman’s best hope

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Procter & Gamble is a hulking target for an uppity investor like Bill Ackman. Typical activist tactics like a breakup won’t work at the $178 billion Pampers-to-Crest giant. New leadership could be one thing to help get P&G back on track, though. Maybe Ackman could even recruit vaunted former Chief Executive A.G. Lafley to help.

from Breakingviews:

Ackman gets closer to permanent capital grail

By Neil Unmack and Jeffrey Goldfarb
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Bill Ackman looks decidedly closer to the holy grail of permanent capital. The founder of activist U.S. hedge fund Pershing Square Capital Management is planning a London-listed vehicle with a market value of at least $4 billion. That would dwarf other public funds, many of which trade at a big discount to net asset value. Ackman’s scale, plus some fee sweeteners, may give him an edge. And his focus on easily priced bets could minimize the NAV problem.

The initial public offering of a new fund, which would invest in Pershing Square’s offshore hedge funds, next year is designed to let Ackman do more of what he does best. The bulk of his 22 percent annualized net return over the last eight years comes from successfully agitating at companies like JCPenney and Fortune Brands. By tapping the market, he wouldn’t need to keep half his assets in cash and other liquid investments, as he does now to accommodate investors who want to exit.

from Breakingviews:

Yahoo activist hasn’t yet earned four board seats

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Activist investor Dan Loeb correctly diagnosed Yahoo’s problem. After the Internet company spurned a juicy bid from Microsoft in 2008 at more than twice its current value and signed away the search business for a pittance, the Third Point founder turned his attention squarely onto the board - and has played a role helping to reform it. But he hasn’t yet provided a sound prescription to cure ailing Yahoo. Until he does, Loeb doesn’t deserve the four seats he wants on the board.

from Breakingviews:

Activist investors embark on fight of their lives

Activist investors generally prefer to be on the attack. So it's odd to see them on the back foot, fighting to preserve an important arrow in their quiver. The Securities and Exchange Commission is weighing whether to curb uppity shareholders from quietly building stakes in companies. The battle should kick into high gear this week when the merger world's top lawyers and bankers hold their annual confab in New Orleans.

It comes down to a question of disclosure. As it stands, investors planning to take an aggressive stance with a company must reveal within 10 calendar days when they accumulate a stake of at least 5 percent. In practice, the rule enables funds to buy considerably more than that before they are obliged to report their positions.

from Breakingviews:

Activist shareholders are back for good reason

Activist shareholders are back -- and for good reason. As the proxy season heats up, pot-stirrers like Carl Icahn and Ron Burkle are raising a fuss at companies from biotech Genzyme  to bookseller Barnes & Nobl. Easy pickings from the credit bubble bursting may be gone. But the activists remain a formidable bunch.

Calpers says its portfolio of funds that challenge underperforming companies has generated an average return of 7.2 percent a year since it started in 1999, compared to an annualized 1 percent loss for the S&P 500 index over the same period. By all rights, the activists' returns should be competed away. Copying the tried-and-true approach shouldn't be difficult to replicate. Buy a slug of a laggard with a pristine balance sheet and demand the company sell itself.

from Breakingviews:

Norway SWF wages lone governance crusade

Norway's $420 billion oil fund is rattling the cage of some of the foreign companies in which it has invested. As a shareholder it deserves praise for putting its head above the parapet. But as a sovereign wealth fund it is treading a fine line.

Norges Bank Investment Management (NBIM) has been stung into action by a combination of domestic political pressure to account for its investments and heavy losses on some parts of its extensive external investment portfolio.

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