From this week’s Hedge Fund Solutions Catalyst Research Report we are highlighting Sandler Capital Management’s investment in cosmetics retailer Bare Escentuals Inc. (NASDAQ: BARE). The activist investor currently holds 3,740,182 shares, or 4.1% of the company.
Investment Catalyst:
On October 13 Sandler Capital announced that they have been having productive discussions with BARE’s board and management and now believe that the Company has begun to address their concerns in a constructive and appropriate manner. As a result, Sandler has reduced their ownership position from 5.4% to 4.1%.
Research Comment:
HFS previously covered BARE in its August 14 Catalyst Research Report (when BARE was trading around $9.20/sh) highlighting Sandler Capital’s August 14 letter to the Board expressing their concern with what they believe to be “a great disconnect between the value of the Company and its brand.” In the letter Sandler stated that they would like to engage the board in an active dialogue to offer suggestions that they believe will enhance value. These include: (i) Improve communication efforts with the investment community, (ii) Utilize the strength of the balance sheet for buying back stock, (iii) explore strategic alternatives and a sale of the company.
Hedge Fund Solutions (HFS) is a Philadelphia-based investment research and strategy consulting firm focused on providing substantive solutions on issues relating to shareholder activism. The Firm has an unparalleled depth of knowledge on activist investing and has become the trusted advisers to numerous institutional investors, CEOs and board members worldwide. For more information on Hedge Fund Solutions or to sign-up for their Catalyst Equity Research Reports, please click here. |
