5 Merger Arb Plays Added to Havens Advisors’ Portfolio in Q2

No matter how much things have changed over the past several years, Wall Street remains a place that is dominated by men. However, one woman who managed to succeed in the hedge fund industry is Nancy Havens-Hasty, the founder of New York-based Havens Advisors LLC.

In 1995, she left Bear Stearns to start her own asset management firm specializing in risk arbitrage and distressed debt. Ms. Havens left the comfort of Bear Stearns because she felt she had risen as high up in the corporate ladder as she could, so she embarked on a new, unknown for her journey. Her initial interest in risk arbitrage came after a stint as an equity analyst covering the computer industry, with Havens Advisors continuing to trade equity markets looking for unique M&A-related investment opportunities that can be exploited. With this in mind, let’s have a look at five merger arbitrage plays added to the portfolio of one of the few successful women hedge fund managers.

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#5. Marketo Inc. (NASDAQ:MKTO)

– Shares owned by Havens Advisors LLC as of June 30: 84,710

– Value of Havens Advisors LLC’s holding as of June 30: $2.95 Million

Havens Advisors LLC acquired a new stake of 84,710 shares of Marketo Inc. (NASDAQ:MKTO) during the second quarter of 2016, which was valued at $2.95 million on June 30. The new position accounted for 2.2% of the firm’s entire portfolio. In late May, the leader in the marketing automation space announced it had agreed to be bought out by U.S.-based private equity firm Vista Equity Partners for $1.79 billion. Marketo shareholders will receive $35.25 in cash per share at closing. The $1.79 billion-acquisition, which will take the marketing-software firm private, is anticipated to close during the third quarter of 2016. Marketo went public in May 2013 at an IPO price of $13 a share and traded up to a record close of $44.48 reached in February 2014, but the stock went into a slump in early 2016. Marketo shares are currently trading roughly one-quarter of a dollar below the deal price. Ken Griffin’s Citadel Advisors LLC owned 599,055 shares of Marketo Inc. (NASDAQ:MKTO) on March 31.

#4. Virgin America Inc. (NASDAQ:VA)

– Shares owned by Havens Advisors LLC as of June 30: 61,800

– Value of Havens Advisors LLC’s holding as of June 30: $3.47 Million

The New York-based asset manager added a 61,800-share position in Virgin America Inc. (NASDAQ:VA) to its portfolio during the April-to-June period, which was worth $3.47 million at the end of the period. In early April, Alaska Air Group Inc. (NYSE:ALK) agreed to buy Virgin America for $2.6 billion, a move that will strengthen the Seattle-based airline as a competitor to the fourth largest U.S. airlines. Apart from paying $2.6 billion in cash, the eighth biggest U.S.-based airline in terms of traffic will assume Virgin America’s long-term debt and capitalized aircraft operating leases, with the aggregate transaction being valued at $4.0 billion. Virgin America, founded by British entrepreneur Richard Branson, went public in November 2014 at a price of $23.00 per share, with its market capitalization being $1.23 billion at the time. Alaska Air was reported to be in a bidding war with competitor JetBlue Airways Corporation (NASDAQ:JBLU). Stephen C. Freidheim’s Cyrus Capital Partners was the owner of 10.51 million shares of Virgin America Inc. (NASDAQ:VA) at the end of March.

Let’s head to the next page of this article, where we will reveal three other M&A plays added to Havens Advisors LLC’s portfolio during the second quarter.

#3. LinkedIn Corp (NYSE:LNKD)

– Shares owned by Havens Advisors LLC as of June 30: 32,000

– Value of Havens Advisors LLC’s holding as of June 30: $6.06 Million

The successful female-run hedge fund also initiated a new position in LinkedIn Corp (NYSE:LNKD) during the three months that ended June 30, which was comprised of 32,000 shares. The new position was worth $6.06 million at the end of June and made up 4.6% of the fund’s entire portfolio. In mid-June, Microsoft Corporation (NASDAQ:MSFT) announced it was acquiring the professional social network company in an all-cash transaction valued at $26.2 billion. This is by far Microsoft’s largest acquisition ever, with some investors and analysts being worried that deal may not be successful given the tech giant’s disappointing history with acquisitions. However, there appears to be real synergy between the two companies, particularly between Microsoft’s Office productivity suite and LinkedIn’s database of more than 400 million professional profiles. Under the definitive merger agreement, LinkedIn shareholders will receive $196 per share in cash at closing. Alex Snow’s Lansdowne Partners had 1.27 million shares of LinkedIn Corp (NYSE:LNKD) among its holdings at the end of the first quarter.

#2. St. Jude Medical Inc. (NYSE:STJ)

– Shares owned by Havens Advisors LLC as of June 30: 96,200

– Value of Havens Advisors LLC’s holding as of June 30: $7.50 Million

Havens Advisors LLC snatched up a new 96,200-share stake in St. Jude Medical Inc. (NYSE:STJ) during the second quarter of 2016, which represented the firm’s fourth-largest equity holding at the end June. The stake was valued at $7.50 million on June 30 and constituted 5.7% of the hedge fund’s portfolio. In late April, Abbott Laboratories (NYSE:ABT) announced it had agreed to purchase medical-products maker St. Jude Medical for $25 billion, representing the largest health-care merger thus far in 2016. Under the terms of the freshly-inked agreement, St. Jude Medial shareholders will receive $46.75 in cash and 0.8708 shares of Abbott. The deal brings together two manufacturers of devices for cardiovascular disease, thus creating a premier medical device leader with top positions in cardiovascular markets. The transaction, subject to the approval of St. Jude Medial shareholders and regulators, is anticipated to close in the fourth quarter. Ken Fisher’s Fisher Asset Management cut its stake in St. Jude Medical Inc. (NYSE:STJ) by 9% during the June quarter to 237,317 shares.

#1. Medivation Inc. (NASDAQ:MDVN)

– Shares owned by Havens Advisors LLC as of June 30: 183,500

– Value of Havens Advisors LLC’s holding as of June 30: $11.07 Million

The New York-based hedge fund firm also acquired a new stake of 183,500 shares of Medivation Inc. (NASDAQ:MDVN) during the June quarter, which was worth $11.07 million at the end of the period. The Medivation-stake was the second-largest position in the hedge fund’s portfolio, accounting for 8.4% of its entire value. Although the U.S cancer drug company has not reached a merger agreement just yet, the San Francisco-based company is currently in merger talks with several drugs firms, including Sanofi SA (ADR) (NYSE:SNY). Just recently, Medivation rejected the French company’s offer of $58 per share and an additional $3 per share bonus related to sales of cancer drug Talazoparib. This comes after Medivation rejected Sanofi’s $52.50 per share offer in April, prompting the French drug maker to embark on a campaign to overhaul the target’s boardroom. Talazoparib is under development for the treatment of breast cancer. Fred Knoll’s Knoll Capital Management owned 4.40 million shares of Medivation Inc. (NASDAQ:MDVN) on March 31.

Disclosure: None