Starboard hedgie investor Jeff Smith wants to slaughter the $4.7 billion Smithfield-Chinese pork deal in favor of splitting up the company to boost the value for shareholders. (Bloomberg)
Move over, Carl Icahn: There’s a new troublemaker in town.
Jeff Smith, the CEO of $1 billion hedge fund Starboard Value — while much more low-key than the tough-talking, Far Rockaway-bred Icahn — is nonetheless fast becoming one of the most aggressive Wall Street saber-rattlers.
The 41-year old investor proved that yesterday when he urged the board of Smithfield Foods to abandon its $4.7 billion sale to China’s Shuanghui — saying a breakup of the Virginia pork processor could yield shareholders up to 60 percent more value.
Smithfield could be worth between $44 and $55 a share compared with Shanghui’s $34-a-share buyout offer, Starboard, which owns a 5.7-percent stake in the company, said in a letter to the board.
The pressure on the pork producer comes just days after Starboard put the squeeze on Office Depot — suing the retailer for failing to hold an annual meeting of shareholders.
Starboard, owner of a 15 percent stake in Office Depot, has nominated six people to the office-supply company’s 10-member board.
If the Starboard CEO seems to be in the middle of every activist situation, it doesn’t surprise some people.
“He’s one of the few activist investors who could potentially be activist in every position in his portfolio,” said Ken Squire, founder of 13D Monitor, which tracks hedge fund activists.
Starboard’s move on Smithfield pushed the company’s shares up 0.9 percent, to $33.08. Office Depot shares ended the day up 1.2 percent, to $4.30.
Starboard has grown from its early days and now goes after bigger, brand-name targets.
The Manhattan hedge fund, launched in 2002, had assets of just $250 million as recently as 2011.
After spinning off from hedge-fund firm Ramius in April 2011, however, Smith and his partners, Mark Mitchell and Peter Feld, embarked on a fundraising campaign that allowed them to close their fund last year at around $1.3 billion.
Since then, it’s been making the headlines.
Starboard recently won two out of three seats it was seeking on the board of wireless communication company DSP.
In May, it also gained six seats on the 10-person board of Tessera Technologies.
Data tracker Fact Set Sharkrepellent ranks Starboard among its top 10 activist investors this year.
The list includes pension funds that regularly seek governance changes, like the massive California Public Employees Retirement System.
Last year Starboard made it’s first big public splash with a campaign to overhaul the board of media conglomerate AOL Inc. The hedge fund embarrassingly lost its campaign to elect three people to AOL’s board, but still succeeded in forcing changes that helped push AOL’s stock up a whopping 43 percent, including a $1.06 billion deal for AOL to sell patents to Microsoft.