New York based hedge fund Elliott Asset Management recently announced they have acquired an 11 percent stake in F&C. F&C is a leading asset manager that’s been at the center of takeover rumors. Elliot’s position is worth in the vicinity of $133.9 million. Industry experts believe the hedge fund will use the stake to bring in new bidders and agitate higher sale prices. It comes through a bulk share trade and after Bank of Montreal made a substantially larger bid.
Elliott has been moving into the European market aggressively. Besides F&C, the company has taken a state in Wm Morrison, a struggling UK grocer. Elliott has also completed a successful campaign that forced McKesson, a prominent drug distributor, to increase a takeover bid for German international trading and logistics company Celesio.Analysts at Canaccord Genuity have speculated that any counterbids for F&C likely had six to eight months to gain regulatory approval for BMO’s offer. They say Elliott could be looking to shake BMO’s offer and F&C management went for the 122 pound per share offer even though it was below the fair value estimate of 130 and 140. Elliott is apparently trying to push BMO into making higher offers.Arun Melmane, a Canaccord analyst, put it this way, “Organic fund growth for F&C has proved slower than we had expected and it was unlikely to hit the upper end of management expectations in 2015. It has picked up new business but not enough to offset the loss of significant pension fund mandates from partners such as Friends Life.”Elliott Asset Management has engaged in a number of activist positions over the last six months. They have aggressively pushed for change in management, company break-ups and return of capital to company shareholders. The company’s forceful brand of activism is being led by the company’s 33 year old Jesse Cohn. Unlike contemporaries Bill Ackman, Carl Icahn and Daniel Loeb to similar strategies, Elliott’s approach lacks effrontery. Still, the hedge fund has gained positive attention with its frequency and varied range of campaigns against technology companies. Both Elliott Management and F&C have failed to comment on any current events.