Merger-Arb Guru Was Playing ExactTarget Inc (ET), Lufkin Industries, Inc. (LUFK) & More

EAC Partners was launched in 2003 by Mike Donatelli and six other partners. Before becoming a hedge fund manager, Donatelli gained his experience by working with merger arbitrage at George Soros’ fund, at UBS, and Steve Cohen’s SAC Capital.

In this way, EAC is involved with high-yield and distressed securities as a part of its strategy. Generally, hedge funds use a variety of strategies, each having something original implemented by hedge fund managers themselves. However, there are several strategies that can be called the basics, and we have compiled a list of six hedge fund strategies to put in your back pocket.

Let’s look at what this merger-arb guru has loved of late:

In first place is ExactTarget Inc (NYSE:ET), in which the hedge fund held 110,832 shares, worth $3.7 million. This was a new position in the EAC Partners’ 13F portfolio. In July, ExactTarget Inc (NYSE:ET) was acquired by salesforce.com, inc. (NYSE:CRM), the latter announcing a tender offer for acquiring all of the outstanding shares of ExactTarget Inc (NYSE:ET) for $33.75 per share.

The next on the list is another merged company, Lufkin Industries, Inc. (NASDAQ:LUFK), in which EAC disclosed a $1.3 million position, which contained 14,690 shares. Lufkin Industries, Inc. (NASDAQ:LUFK) was a new position during the second quarter of the year. At the beginning of July, Lufkin became a part of General Electric Company (NYSE:GE)‘s Oil and Gas division. The value of the deal amounted to more than $3 billion.

Another new position in the equity portfolio of EAC was NetSpend Holdings Inc (NASDAQ:NTSP), in which the hedge fund disclosed a $1.2 million stake, containing 77,600 shares. NetSpend Holdings Inc (NASDAQ:NTSP) was purchased by Total System Services, Inc. (NYSE:TSS) in the second quarter of the year.

In BMC Software, Inc. (NASDAQ:BMC), EAC Partners reported ownership of 23,168 shares, worth about $1.1 million. BMC Software, Inc. (NASDAQ:BMC) has gone private and was acquired by a group of investors including Bain Capital and Golden Gate Capital. The group acquired BMC Software, Inc. (NASDAQ:BMC) at a price of about $46.25 per share or $6.9 billion.

And the last on our list is Power One Inc (NASDAQ:PWER), another recent acquisition, in which Donatelli’s hedge fund owned 109,987 shares, worth $695,000. Last month, Power One Inc (NASDAQ:PWER) was acquired by Switzerland-based ABB Ltd (ADR) (NYSE:ABB).

In addition to EAC Partners, Jeffrey Smith’s Starboard Value, Van Schreiber’s Bennett Lawrence Management and Mario Gabelli’s GAMCO Investors are a few other hedge funds worth watching as 13F filings continue to roll in.

Disclosure: none