Slaying Goliath to save the Dragon
In the blue corner – Emirates National Oil Company (ENOC), which recently hired proxy solicitation firm Georgeson to get out the shareholder vote in favour of its $1.9 billion bid to buy out the 48 percent of Dragon Oil it doesn’t already own. (Georgeson say they are the oldest and best shareholder consultancy in the business, and helped engineer a record turnout for the HBOS AGM that approved Lloyds’s takeover of the bank.)
In the red corner – retail investors keen to “Save Dragon Oil”. Armed with a website and a 3,000-page printout detailing of the Turkmenistan-focused oil explorer’s investors…
from Funds Hub:
Has the moment for greater UK hedge fund regulation passed?
Tuesday's grilling of UK hedge fund executives is likely to create plenty of noise but produce little in the way of new rules.
While media-shy TCI founder Chris Hohn and others will face tough questions from the Treasury Select Committee on financial stability, short-selling and other issues, it nevertheless seems that the pro-legislation lobby's position may be weaker than it has been in recent years.
For one thing, many hedge funds simply do not have the financial clout -- and therefore carry the associated risks seen by some politicians -- that they once did.
At the start of 2007 hedge funds were booming and assets had swelled to more than $2 trillion, according to HedgeFund Intelligence. Coupled with the substantial leverage employed by some strategies, hedge funds were a significant force in many markets.
Today, leverage has been cut back, investors are pulling out assets, and many funds are playing it safe and sitting on cash.
While never to be dismissed, a repeat of LTCM, where one huge fund dominated a market and many players mimicked its movements, looks less of an threat now.
Activists funds, meanwhile, whose tactic of buying into firms and calling loudly for "shareholder value" has caused much controversy, have less to work with in a bear market where firms are unwilling or unable to do deals or take on debt.
Congratulations to the operators of http://www.savedragon.com.ENOC‘s bid, which has already been rejected by some of the larger minority shareholders and appears to be based upon what ENOC can afford rather than what is it worth. The bid is opportunistic and seriously undervalues the company.