Hedge fund honcho David Einhorn is having trouble enlisting allies in his battle to get his hands on some of Apple’s $137 billion cash hoard.
Another big investor has come out in support of Apple’s proposal to eliminate “blank check” preferred stock — a stance Einhorn has called on shareholders to reject.
The California State Teachers’ Retirement System, a $157.8 billion pension fund that owns 1.6 million Apple shares, told The Post they are siding with Apple against Einhorn.
CalSTRS supports the proposal because “blank check” preferred stock “can be used as anti-takeover defenses and entrench a board,” said Anne Sheehan, the director of corporate governance.
Standing with Einhorn is the New Jersey Division of Investment, which manages $70 billion in New Jersey state pension money, the fund’s chairman Bob Grady told The Post on Tuesday.
“Apple has over $130 billion in cash and we think more of that cash should be returned to shareholders,” said Grady, a managing director at private equity firm Cheyenne Capital.
Grady declined to comment on Apple’s specific proposal, which would require shareholder approval to issue preferred stock.
On Monday, a spokesman for the pension fund said the fund supports Apple’s proposal to eliminate “blank check” preferred stock, but Grady on Tuesday clarified that while the fund generally opposes such stock, it is supporting Einhorn’s effort to get the gadget maker to distribute more cash to shareholders in any way possible.
Last week, the $254.1 billion California Public Employees’ Retirement System — the biggest US pension — said it backs Apple’s proposal. Florida’s $127 billion pension fund also tends to look askance at dual-class structures, said Michael McCauley, a senior executive for the fund.
Last week, Einhorn fired off a letter urging Apple shareholders to reject the change, saying it restricts the board’s ability to “unlock substantial shareholder value.” Shareholders are slated to vote on the proposal at Apple’s annual meeting set for Feb. 27.
Einhorn, head of $8 billion Greenlight Capital, has been pushing Apple to return some of its cash to investors for months. He wants it to issue preferred shares that pay a 4 percent dividend and trade separately from the common stock. Apple said it is considering his proposal.