Billionaire Dan Loeb’s Third Point smacks down activist targeting UK vehicle

Activist investors agitate for change at companies they believe are underperforming — but it appears they don’t like having their own tactics used against them.

Third Point, the New York activist hedge fund run by billionaire Dan Loeb, today hit out at the activist targeting its UK-listed vehicle.

Third Point said Asset Value Investors (AVI) was trying to “commandeer the apparatus of the Company in pursuit of its own agenda, at the expense of all shareholders” and accused AVI of simply trying to promote itself.

However, Loeb’s company gave some ground, announcing a new scheme meant to pacify investors. Third Point said shareholder would once again be given the opportunity to trade in shares in the UK vehicle for its Cayman Islands-based Master Fund. The scheme was first announced earlier this year but the second iteration in 2022 will offer a better price to trade at.

The scheme, which will be voted on at a special meeting in December, follows agitation from AVI for a general meeting to discuss the gulf between Third Point’s share price and the value of the assets it holds.

AVI has been pushing Third Point to let investors to sell shares back at a special price reflecting the underlying assets, rather than the share price, which carries a discount of around 15%. AVI has the support of shareholders who hold 10% of voting rights in Third Point Investors UK.

AVI has been engaged in a month’s long letter writing campaign and last month threatened legal action if Third Point continued to ignore its requests for a meeting and vote.

Third Point said today it “hopes that it will not be necessary to waste further resources on any court action.” Investors will be given the opportunity to discuss AVI’s proposals at December’s meeting but will not be allowed to vote on it.

Loeb’s company accused AVI of lobbying Third Point simply “as a means of drawing attention to itself, albeit through novel legal arguments and an incorrect understanding of how companies work”. Third Point said AVI itself “trades at a persistent discount [and] has not itself adopted discount-control mechanisms similar to those AVI advocates for the Company.”

Analysts at Numis said the 2022 Master Fund exchange scheme was “much more attractive” to the initial iteration, but said: “Many investors will have little appetite to hold a Cayman domiciled fund, or may not meet the $10m minimum subscription size and therefore the facility will have fairly niche appeal, but is one of a range of measures from the Board.”

Shares in Third Point rose 0.1p or 0.3% to 30.2p in London. The UK fund holds a mixture of public and private equity as well as credit.

Loeb, worth an estimated $4 billion, is known for his campaigns against companies like Sony and Sotheby’s. A lifelong surfer, Loeb named Third Point after a legendary surfing spot in Malibu, California.