Relational Investors LLC, the activist fund co-founded by Ralph Whitworth and David Batchelder, disclosed a stake of about 3.5 percent in B\/E Aerospace Inc. (BEAV) as the maker of aircraft seats conducts a strategic review. <\/p>\n
The firm started buying the shares in February and began talks with B\/E management shortly therafter, according to a person familiar with the matter. San Diego-based Relational, which manages about $6 billion, disclosed the stake yesterday in a regulatory filing. <\/p>\n
Relational supports B\/Es decision to evaluate options to improve capital allocation and maximize shareholder returns, and is considering whether to seek board seats before the June 4 nominating deadline, said the person, who asked not to be identified because the talks are private. <\/p>\n
B\/Es review, disclosed May 4, surprised some investors because B\/E had just said in April that it was working on two acquisitions of its own. In addition to seats, B\/E supplies aircraft beverage makers, galley chillers, oxygen and lighting systems and aerospace fasteners. It also has made a foray into the oil and gas equipment-distribution business. <\/p>\n
Greg Powell, a spokesman for B\/E, didnt respond to a voice message seeking comment. B\/E, based in Wellington, Florida, said it hired Citigroup Inc. and Shearman & Sterling LLP to help it explore alternatives, including a sale of the whole company or separation of selected businesses. <\/p>\n
B\/E Aerospace has great core assets and a strong competitive position, Matthew Hepler, managing director of research at Relational, said yesterday in an e-mailed statement. We welcome the companys announcement to explore strategic alternatives and will encourage the board to evaluate and pursue opportunities, in a disciplined manner, that will maximize value for all shareholders. <\/p>\n
Amin Khoury, 75, co-founded the aerospace supplier with his brother Robert in 1987 and is chairman and co-chief executive officer, splitting his executive duties with operations chief Werner Lieberherr since the start of the year. The board has just six members, including the Khoury brothers. <\/p>\n
The outcome of the review is very much dependent on Mr. Khourys intentions, Joseph Nadol, a New York-based aerospace analyst with JPMorgan Chase & Co., wrote in a May 13 research report. As recently as two weeks ago, we would have thought those were to continue growing B\/E Aerospace in its core aerospace market as well as in oil and gas rental equipment. <\/p>\n
B\/E Aerospaces aviation sales have boomed as planemakers Boeing Co. (BA) and Airbus Group NV (AIR) compiled a record backlog of 10,130 orders, according to data compiled by Bloomberg Industries. First-quarter results were the best ever, Khoury told analysts on a call last month. <\/p>\n
Relational also holds stakes in energy group Hess Corp., agricultural commodity processor Bunge Ltd., snacks supplier Mondelez International Inc., x-ray maker Hologic Inc. and air-conditioning manufacturer Ingersoll-Rand Plc, according to its most recent holdings disclosures. Third Point LLC, the hedge fund run by Daniel Loeb, exited its B\/E holdings in the first quarter, according to a regulatory filing yesterday. <\/p>\n
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B\/E Aerospace Targeted by Relational Investors With New Stake<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Relational Investors LLC, the activist fund co-founded by Ralph Whitworth and David Batchelder, disclosed a stake of about 3.5 percent in B\/E Aerospace Inc. Continue reading