13D weekly report - Nov 04, 2024 to Nov 08, 2024

Converium Capital and Erez Asset Management Initiate Governance Discussions with Franklin Street Properties Corp (FSP)

Key Summary: On November 5, 2024, Converium Capital and Erez Asset Management announced ongoing discussions with the Board and management regarding corporate governance, board composition, capital allocation, and strategic plans, including asset dispositions. They recommended appointing Mr. Schanzer, Chairman and Chief Investment Officer of Erez Asset Management, to the Board 

Market Cap: $201 million | Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets.

On November 5, 2024, Converium Capital and Erez Asset Management stated that they have engaged and plan to continue discussions with the Board and management about corporate governance, board composition, operations, capital allocation, and strategic plans, including asset dispositions. They have recommended appointing Mr. Schanzer, Chairman and Chief Investment Officer of Erez Asset Management, to the Board. Additionally, they intend to address various topics such as management, capital and corporate structure, and dividend or buyback policies, while potentially communicating with other shareholders and third parties on these matters. Source

Pinetree Capital Proposes Governance Improvements to TruBridge, Inc (TBRG)

Key Summary: On November 5, 2024, Pinetree Capital Ltd (14.99%) discussed corporate governance improvements with the Board and management, proposing enhanced Board composition for shareholder representation, better alignment of executive compensation, and improved capital allocation.

Market Cap: $194 million | TruBridge, Inc. provides healthcare solutions and services for community hospitals, clinics, and other healthcare systems in the United States and internationally.

On November 5, 2024, Pinetree Capital Ltd (14.99%) engaged in discussions with the Board and management, proposing improvements to corporate governance practices, enhancing Board composition to include shareholder representation, aligning executive compensation appropriately, and improving capital allocation. Source

Joseph Stilwell Aims to Enhance Shareholder Value Through Collaboration with Central Plains Bancshares (CPBI)

Key Summary: On November 5, 2024, Joseph Stilwell stated his intent to collaborate with management and the Board to enhance shareholder value.

Market Cap: $53 million | Central Plains Bancshares, Inc. operates as the bank holding company for Home Federal Savings and Loan Association of Grand Island that operates as a federally chartered stock savings and loan association in Nebraska, the United States.

On November 5, 2024, Joseph Stilwell stated that he aims to collaborate with management and the Board to enhance shareholder value. Source

Shaltout and Desai Disclose Stake and Demand Accountability at Pacific Coast Oil Trust (ROYTL)

Key Summary: On November 7, 2024, Moe Shaltout and Ravi Desai disclosed a 10.7% active stake in the company, emphasizing their commitment to unitholder investments amid ongoing mismanagement by Pacific Coast Energy Company (PCEC) and the Trustee's inaction. On October 11, 2022, concerned shareholders, representing 11.4%, urged The Bank of New York Mellon Trust Company to sue PCEC, the trust's operator, and threatened to call a special meeting to remove the trustee if they refused. By May 2023, their aggregate ownership increased to 21.3%, and they filed proxy materials to remove the trustee and amend the Trust Agreement, resulting in the first proposal's approval at the July 12, 2023, special meeting, while the second was rejected.

Market Cap: $10 million | Pacific Coast Oil Trust acquires and holds net profits and royalty interests in various oil and natural gas properties located in California.

Moe Shaltout and Ravi Desai

On November 7, 2024, Moe Shaltout and Ravi Desai disclosed a 10.7% active stake in the company and reiterated their commitment to protecting unitholder investments, citing years of mismanagement by Pacific Coast Energy Company (PCEC) and the Trustee's inaction. They highlighted ongoing issues, such as inflated Asset Retirement Obligations (AROs) and financial opacity, which they believe threaten the Trust's future. Shaltout and Desai pledged to restore accountability by reinstating distributions and demanding transparency from PCEC and the Trustee. Source

Shipyard Capital, Cedar Creek Partners and Walter C. Keenan

• On October 11, 2022, Shipyard Capital, Cedar Creek Partners and Walter C. Keenan ("concerned shareholders" together 11.4%) sent a letter to the company's trustee, The Bank of New York Mellon Trust Company, requesting that it file suit against PCEC, the trust's operator. They stated that if the  trustee refuses, they intend to call a special meeting to remove the trustee.
• On December 12, 2022, the concerned shareholders (12.8%) stated their belief that the trustee is not properly representing unitholders. The trustee has refused to file suit against PCEC for what we believe are illegal and improper assessments against the trust, preventing the trust from making distributions and potentially forcing dissolution and liquidation, which we believe would harm unitholders.
• On December 22, 2022, the concerned shareholders together with Evergreen Capital Management (22.5%) filed 13D reiterating their concerns. Source
• On January 12, 2023, the concerned Group filed a fifth amended Schedule 13D updating Evergreen’s Unit holding to reflect recent client attrition (bringing the 13D Group’s aggregate ownership to 21.3%).
• On May 8, 2023, the concerned Group filed proxy materials urging shareholders to vote FOR its two proposals.
• To remove the Bank of New York Mellon Trust Company, N.A. as trustee of the Trust.
• To adopt an amendment to Section 8.02 of the Trust Agreement requiring the Trust to bear all costs associated with calling any meeting of Unitholders that is called by Unitholders owning of record not less than 10% of the then outstanding Units should any of the proposals submitted at such meeting receive a majority vote in favor.  
• Source
• On May 24, 2023, the concerned Group filed proxy materials urging shareholders to vote FOR its two proposals. Source
• At the special meeting held on July 12, 2023, shareholders approved the first proposal but the second proposal was not approved.

Azenta (AZTA) reaches agreement with Politan Capital

Key Summary: On November 1, 2023, Politan Capital (7.61%) discussed business strategies and corporate governance with the company's management after signing an NDA. Politan submitted board nominations on October 30, 2023, including Quentin Koffey. On November 13, 2023, the company nominated Didier Hirsch and Martin Madaus for its Board at the 2024 AGM and announced a $500 million share repurchase plan for Fiscal 2024, leading Politan to withdraw its nominations and express support for the company's actions. On November 1, 2024, the Politan Parties (9.4%) entered into a Cooperation Agreement with the company.

Market Cap: $2 billion | Azenta, Inc. provides life science sample exploration and management solutions for the life sciences market in North America, Europe, China, the Asia Pacific, and internationally. 

• On November 1, 2023, Politan Capital (7.61%), after having entered into a non-disclosure agreement with the company, was engaged in discussions with the management and board regarding various aspects of the company, including its business, strategies, and corporate governance. In accordance with the November 2, 2023 nomination deadline specified in the company's Amended and Restated Bylaws, Politan Capital submitted a formal notice on October 30, 2023, to nominate candidates for the Board. One of the nominees was Quentin Koffey, Politan's Managing Partner and Chief Investment Officer. Source 
• On November 13, 2023, the company made strategic changes by nominating Didier Hirsch and Martin Madaus for its Board at the 2024 AGM. The company announced its plans to repurchase $500 million in shares in Fiscal 2024. Politan Capital Management withdrew its board nomination, expressing support for company's actions and performance. Source
• On November 1, 2024, the Politan Parties (9.4%) entered into a Cooperation Agreement with the company, which includes several key provisions: increasing the Board size by three directors, appointing Quentin Koffey to the Board with a term expiring at the 2025 Annual Meeting, establishing a new Value Creation Committee with Koffey as a member, and appointing William Cornog as Chair. The agreement also involves nominating the Value Creation Committee members for election at the 2025 Annual Meeting and ensuring two current directors do not stand for re-election.

Starboard Gains Support from Proxy Advisors for Proposal to Collapse Dual-Class Share Structure at News Corp (NWS)

Key Summary: On September 9, 2024, Starboard Value proposed eliminating News Corp’s dual-class share structure, criticizing the governance issues related to the Murdoch family's super-voting rights. They planned to file a proxy statement and seek shareholder support for this change.

Market Cap: $15 billion| News Corporation, a media and information services company, creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide.

• On September 9, 2024, Starboard Value announced it had sent a letter to News Corp shareholders proposing the elimination of the company’s dual-class share structure. Starboard criticized News Corp’s governance, highlighting issues with the Murdoch family's super-voting rights and internal family conflicts. The letter argued that extending these rights was unreasonable and exacerbated the company's valuation discount. Starboard planned to file a proxy statement with more details and sought shareholder support to address these governance concerns.
• On September 20, 2024, Starboard Value (4.6%) filed proxy materials seeking stockholder approval for a non-binding proposal at the 2024 Annual Meeting to eliminate News Corp’s dual-class share structure, allowing each share to have one vote. They believe this change will enhance shareholder value and governance. The Annual Meeting will also address the election of director nominees, the ratification of the accounting firm, and advisory votes on executive compensation and the dual-class proposal. Source
• On October 9, 2024, Starboard Value (4.6%) filed proxy materials seeking stockholder approval for its proposals.
• On November 7, 2024, Starboard issued a press release announcing that ISS, Glass Lewis and Egan-Jones recommended shareholders vote FOR Starboard’s proposal to collapse the dual-class share structure at the company’s upcoming 2024 AGM. 

Past

In October 2023, Starboard Value issued a presentation suggesting that News Corp should consider spinning off its online property businesses, estimating it could generate a $7 billion windfall for the company. Starboard believes that News Corp's current valuation of $12.6 billion "does not make sense" and suggests breaking up the business to increase shareholder value. The hedge fund sees potential in separating the digital real estate assets, such as Move Inc and REA Group, through a tax-free spin-off, which could lead to a significant increase in the company's share price.

Oaktree Capital Group Holdings Plans Strategic Discussions to Enhance Shareholder Value at Indivior (INDV)

Key Summary: On October 4, 2024, Oaktree Capital Group Holdings (7%) intends to meet with the Board and management to explore strategies for increasing shareholder value, including capital allocation, structural adjustments, and potential sale options. On September 22, 2023, Two Seas Capital (10%) discussed joining the Board with CEO Mark Crossley but decided against the appointment. They continue discussions with management and the Board to enhance shareholder value and improve corporate governance.

Market Cap: $1.4 billion | Indivior PLC, together with its subsidiaries, engages in the development, manufacture, and sale of buprenorphine-based prescription drugs for the treatment of opioid dependence and co-occurring disorders.

• On September 22, 2023, Two Seas Capital (10%) discussed the possibility of joining the Board with Mark Crossley, the CEO of the company. However, it was decided not to proceed with this appointment. Two Seas Capital has ongoing discussions with the management and Board regarding their investment and may explore options to maximize shareholder value and improve corporate governance. Source 
• On October 4, 2024, Oaktree Capital Group Holdings (7%) plans to discuss with the Board and management ways to increase shareholder value, focusing on capital allocation, capital structure adjustments, and exploring strategic alternatives, potentially including a sale of the company. Source
• On November 6, 2024, Oaktree Capital Group Holdings expressed concerns to the board regarding the company's poor performance over the past year and a more than 50% drop in stock price. They cited strategic and communication failures, particularly regarding competition for the core product Sublocade and guidance reductions, which heightened investor worries about the board's accountability. Oaktree urged immediate action to address these issues and called for board refreshment with directors committed to improving shareholder value, while expressing a willingness to work constructively with the board, noting that shareholders would support necessary changes. Source

Stadium Capital Management Voices Concerns Over Sleep Number's (SNBR) Long-Term Performance Following Governance Changes

Key Summary: Stadium Capital Management, holding 8.5% as of August 2023, expressed concerns over the company's long-term underperformance and the need for shareholder representation on the Board to improve governance and operations. By September, the firm criticized the Board for poor shareholder returns, capital allocation, and management oversight, requesting a meeting to discuss changes. Following a cooperating agreement in November 2023, the company added two new directors to its Board. Despite recent changes, Stadium Capital, now holding 11%, remains concerned about performance and plans to engage further on the need for additional reforms.

Market Cap: $293 million| Sleep Number Corporation, together with its subsidiaries, offers sleep solutions and services in the United States.

• On August 25, 2023, Stadium Capital Management (8.5%) stated that it is concerned with the company’s long-term underperformance and believe shareholder representation on the Board is needed to drive improvements to the governance, capital allocation and operations. Stadium Capital stated that it is  engaging in discussions with the Board and management regarding the composition of the Board and opportunities to enhance shareholder value. Source
• On September 13, 2023, Stadium Capital Management (9%) issued a letter and press release to the Board requesting a meeting with the independent directors to discuss the urgent need for shareholder-driven Board change. In the letter, Stadium Capital asserted that the Board has presided over abysmal shareholder returns, egregious capital allocation, poor corporate governance practices and questionable compensation decisions. Stadium Capital also expressed its views that the Board’s ineffective oversight has enabled management to let costs run out-of-control in pursuit of its wellness technology strategy. It has also expressed disappointment with the Board’s rejection of a good faith offer to collaborate on director refreshment, including adding its representative to the board.

Valuation insight

"Sleep Number spends 2x on R&D relative to Tempur Sealy even though Tempur Sealy generates, by our estimates, roughly 4x the retail sales of Sleep Number. Yet, based on our research, if Sleep Number spent proportionally the same amount on R&D as Tempur Sealy does, Sleep Number’s 2023 expected EPS would double."

• On November 7, 2023, Stadium Capital Management entered into a cooperating agreement with the company and pursuant to it, the company agreed to add Stephen Macadam and Hilary Schneider (the “New Directors”) to its Board. Source
• On October 30, 2024, the company announced Board and corporate governance changes.
• On November 4, 2024, Stadium Capital Management (11%) expressed concerns about the company's long-term performance despite recent leadership and governance changes. The firm intends to engage with the company and other stakeholders to evaluate the need for further changes. Source