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Hedge fund boss Dan Loeb slams ‘juvenile’ activist as ‘stain’ after Third Point chair forced to quit

·3-min read
Third Point Investors CEO Dan Loeb (Third Point)
Third Point Investors CEO Dan Loeb (Third Point)

New York hedge fund boss Dan Loeb has attacked the activist investors targeting his London-listed investment vehicle, calling them a “stain” on the City engaged in “juvenile antics.”

The strong comments come after Third Point’s UK chair Steve Bates resigned from the board, citing pressure from activists.

Third Point Investors, Loeb’s London listed vehicle, said Bates resigned on Wednesday after pressure in private meetings with Asset Value Investors (AVI) and Staude Capital.

Third Point said: “One of the activists resorted to making personal threats against Steve Bates, namely that should he refuse to accede to their proposals, they would attack him in other business areas. This naturally raised a business conflict for Mr. Bates — if he continued as chair of TPIL, he would be subject to behaviour which would impede the carrying out of all his responsibilities and duties, including those he owes to the company.”

Bates said: “I very much regret having to leave the Board but have recently been put in a position where it is impossible for me to continue as a director of TPIL. I wish to thank my fellow board members, as well as the manager, for their collective efforts to strengthen the Company’s foundation and its value proposition for investors. I have no doubt these efforts will continue.”

Rupert Dorey, a Third Point director, said he was “appalled that Steve has been put in a position where he has decided to leave the board, but understands his reason for doing so.”

Loeb railed against the activists, who have been targeting Third Point for months.

“Steve Bates’ resignation is loss for all shareholders,” he said in a rare personal statement on the matter. “The behavior by these so-called ‘activists’ is a stain on institutional investors who attempt to engage constructively with boards and management teams. Being a successful activist requires moving on when shareholders reject your plans rather than resorting to underhanded tactics. These juvenile antics smack of desperation and inexperience.”

Bates’ resignation comes after a long-running public battle between Third Point and AVI. AVI, which owns 10% of Third Point, has been agitating actions to reduce the gap between Third Point’s share price and the value of the assets it holds.

AVI secured a vote on ousting Joshua Targoff, Loeb’s representative on the board, earlier this month. AVI said the vote was a proxy for its own proposal on narrowing the discount. That resolution was defeated, with 75% of votes cast backing Targoff. Third Point said fewer than 20% of eligible votes went against their man.

AVI questioned the independence of a voting block that backed Third Point and vowed to fight on, asking for private meetings. This led to the meeting between AVI, Staude and Bates.

Today, Tom Treanor of AVI said: “It is unfortunate that the Chairman has chosen to resign.

“We note, however, the continued claims from the company and manager that shareholders rejected our recent motion, framed as a proxy for the broad activist agenda, to remove a director.

“This is a gross distortion of reality, as a majority of shareholders (52%) and an overwhelming majority of shareholders independent of the Manager (75%) supported our resolution, which was only defeated due to the votes controlled by the “VoteCo” entity which owns no economic stake in the company.

“We continue to believe this raises serious questions around governance at the company.”

Staude Capital has been approached for comment.

Loeb, worth an estimated $4 billion, is known for his campaigns against companies like Sony and Sotheby’s. A lifelong surfer, he named Third Point after a legendary spot in Malibu, California.

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