Interesting times ahead for FD Technologies, the company run by Seamus Keating, which has seen a number of curious names pop up on the company’s share register in recent times.
One of those is Irenic Capital Management, a New York activist investor which just this week pushed its stake in FD to 14 per cent, the latest in a series of acquisitions over the course of the last few months.
Irenic now holds £49.7 million (€57.81 million) on FD shares but it is less the size of its stake than the nature of its strategy that is most interesting.
The fund, founded by Adam Katz and Andy Dodge, is an activist fund, meaning it takes positions in companies in order to use its shares and voting power – and often its public platform – to encourage management teams to make changes in the way they run their businesses.
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It has not been shy about doing precisely that in recent years, publicly opposing gas producer Capricorn Energy’s plan to sell itself to an Israeli energy group; calling on Wagamama boss Ken Hanna to step down; advocating for the appointment of its own board members to aerospace company Barnes Group; and once voicing its opposition to Rupert Murdoch’s plans to merge Fox and NewsCorp.
In that context, another curious name has appeared on the FD share register in recent days, that of Newtyn Management, LLC, a New York-based investment fund that has bought up 5.1 per cent of the shares, worth £18.1 million (€21 million).
Newtyn is not an activist investor, according to its website, but it has popped up on the share registers of companies where Irenic was being most voluble in its activist positions. They joined the shareholder rebellion against Capricorn Energy’s sale of itself and they were on the share register when Irenic called for Hanna to step down from the board of the company behind Wagamama’s parent company The Restaurant Group.
Newtyn also had a stake in Theravance Biopharma at the same time as Irenic, during which time Irenic nominated one of its advisers to the company’s board.
All of which could be a great coincidence. Wall Street is a small place, after all, and investors frequently cross paths on various share registers – especially since we don’t have any clarity yet on Irenic’s intentions.
Activist investors traditionally agitate for changes in business strategy or for the break-up of companies to release value, two things that FD is already doing.
The company is in the midst of a big restructuring which involves splitting itself into three. It has already begun the merging of its marketing division, MRP, with an American firm called Contentgine to create a joint-venture entity in which FD will hold 49 per cent.
And it is running the rule over the sale of its technology and consulting arm, KX, though that will take a little while, it warned, noting in one stock market announcement that it will “take a measured approach”.
This might explain Newtyn’s interest. On its website it describes itself as a “value-oriented investment firm” which aims to “capitalise on special opportunities that may arise from a corporate restructuring, bankruptcy or liquidation, proposed merger, acquisition or divestiture, or a new public offering”.
Either way, interesting times ahead for FD Technologies.
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