Angie’s List, Inc. (ANGI): Hedge Fund Manager Is So Bullish That He Invested His Own Money Too

Angie’s List (NASDAQ:ANGI) and Eric Semler’s TCS Capital reached an agreement to expand the size of ANGI’s board by two and appoint three new directors including Eric Semler. The third spot became available after John Biddinger retired from the board. According to the press release Eric Semler, who is a former New York Times journalist, said the following:

“We are pleased to have reached a constructive agreement with Angie’s List. The Company has a strong brand and customer base, and I believe we have the opportunity to realize exceptional returns for all shareholders. Tom Evans brings deep executive level experience in the e-commerce and digital media industries, George Bell further enhances the Board with his wealth of experience as a senior executive, board director and investor across a broad spectrum of the digital communications industry, and I look forward to joining as another shareholder representative in the boardroom. We will work with our fellow board members to oversee Angie’s List management and to help drive improved operating and financial performance in 2016 and beyond. We are excited to begin this important work immediately.”

TCS Capital owns 5.9 million shares of ANGI corresponding to 10.1% of its outstanding shares. The 13D filing also revealed the fact that Eric Semler controls an additional 650 thousand shares which are held in his family’s trust. Angie’s List shares gained about 30% over the last 12 months. Barry Diller’s IAC wanted to buy ANGI for $512 but the offer was rejected. Back in November TCS Capital said the following about this decision in another filing:

“On November 30, 2015, the Reporting Persons delivered a letter to the Issuer’s Chairman, John H. Chuang, and the Issuer’s Board of Directors (the “Board”).  In the letter, Mr. Semler stated, among other things, that while he appreciated the time Mr. Chuang and certain other members of the Board have taken to meet with him to discuss his serious concerns, their discussions have made it clear that the Board has no intention of pursuing a combination with IAC’s HomeAdvisor.  According to their analysis shown in the letter, the Reporting Persons believe that such a combination would lead the Issuer’s shares to trade at $20 per share or higher.  The Reporting Persons call on the Board in the letter to immediately hire a financial advisor to pursue strategic alternatives, including IAC’s public offer.  In the letter, Mr. Semler declined the Issuer’s offer to join the Board at this time, noting that he prefers to avoid the onerous standstill provisions that the Board demanded for his appointment to the Board.  He also stated in the letter that he will continue to seek to effect change from outside the boardroom – at least for now.  The full text of the letter is attached hereto as exhibit 99.1 and is incorporated herein by reference.”

In that letter Eric Semler summarized his thesis in this paragraph:

“As you know, we strongly believe that a merger with HomeAdvisor would create tremendous value for all ANGI shareholders. This would be achieved through a tax-free exchange, which would allow ANGI shareholders to participate in the upside from the ANGI-HomeAdvisor combination.  This combination would create a compelling public market pure play in the $300 billion home services market.  We also believe that a merger with HomeAdvisor would yield significant revenue and cost synergies and would give ANGI a stronger technology platform.  Under our suggested transaction structure, ANGI would issue common shares to IAC giving IAC a 60% ownership position in the combined entity, and ANGI shares would remain publicly traded.”

Ownership Summary Table

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