Jana Partners LLC, the $5 billion activist hedge fund run by Barry Rosenstein, said Rockwood Holdings Inc. (ROC:US), the specialty chemicals maker seeking to exit businesses, may be worth $80 a share in a takeover.
Rockwood, which seeks to focus on its lithium and surface- treatments businesses, could attract bids from larger chemicals makers after selling other units, Jana said in a first-quarter letter to investors. Rockwood shares climbed 1.2 percent to $64.01 at 11:42 a.m. in New York trading, bringing the gain this year to 30 percent including reinvested dividends.
“We believe a ROC made up of lithium and surface treatments could make a very attractive takeover candidate for large multinational chemical names” such as BASF SE, Albermale Corp. and Soc. Quimica y Minera de Chile SA, Jana said in the letter, referring to Rockwood by its ticker symbol.
Rockwood Chairman and Chief Executive Officer Seifi Ghasemi said in February he hired Lazard as he’s exploring options for three of his five units. The company, based in Princeton, New Jersey, may sell its additives unit as well as titanium-dioxide operations and a German ceramics business. Permira Advisers LLP and Blackstone Group LP are among bidders who made it into the second round to buy Rockwood’s ceramics unit, three people familiar with the matter said earlier this month.
Bain Capital, Cinven Ltd., TPG Capital LP and BC Partners Ltd. are also still in the running for CeramTec, the people said.
Jana held 2.77 million Rockwood shares at the end of December, a 3.5 percent stake, according to data compiled by Bloomberg. Jana has trimmed its position after the stock gained following the announcement of the company’s intention to exit businesses, it said in the letter.
Fifth & Pacific
Charles Penner, a partner at Jana, declined to comment on the letter, as did Nahla Azmy, vice president of investor relations and communications at Rockwood.
Fifth & Pacific (FNP:US) Cos., the fashion retailer that owns labels including Kate Spade, could be worth as much as $28 a share after it sells its Lucky and Juicy brands, Jana said in the letter.
Fifth & Pacific has received expressions of interest from potential bidders including apparel maker VF Corp. and buyout firm Leonard Green & Partners LP as it explores sales of Lucky and Juicy, together or separately, for a combined value of about $700 million, Bloomberg News reported April 12, citing people with knowledge of the matter.
Jana purchased 3.29 million shares of Fifth & Pacific, a 2.8 percent stake, in December, according to the letter and data compiled by Bloomberg. Jana reduced its position after the stock rose following reported bids for the brands, it said in the letter. Fifth & Pacific rose 0.8 percent to $20.49 at 11:52 a.m. in New York trading.
“The Kate Spade brand has enormous runway for top line growth and for margin expansion,” Jana said in the letter. “This opportunity was not at all reflected in our purchase price of FNP as Kate Spade’s potential was obscured by the weaker Lucky and Juicy brands. We believed focusing investors on Kate would lead to a major re-rating of the shares,” it said, referring to First & Pacific by its ticker symbol.
Jane Randel, a spokeswoman for First & Pacific, declined to comment.
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