Bill Ackman's Pershing Square Sells $835 Million in Mondelez Shares
March 16 2016 - 07:00PM
Dow Jones News
William Ackman's Pershing Square Capital Management LP said it
sold nearly $835 million in shares of snacks maker Mondelez
International Inc., a day after losing $1 billion on paper on its
investment in Valeant Pharmaceuticals International Inc.
In an email to investors, Mr. Ackman said Pershing reduced its
stake to 5.6% because Mondelez had become an outsized position "in
light of its initially large size and its outperformance relative
to other holdings."
The fund completed a block sale of 20 million Mondelez shares
after markets closed Wednesday. The stock, which closed at $41.72,
is up 20% over the past 12 months.
Mr. Ackman's investment in Valeant, meanwhile, has become a
considerable headache. The shares plunged 51% on Tuesday on
disappointing guidance and a possible default warning.
Mr. Ackman acknowledged to his investors that the company
"shocked the market" and the day's events "caused investors to lose
total confidence in the company." He also added that he planned to
get more involved at the drug company.
Pershing Square's 9% stake in Valeant is now its worst
investment ever and compounds its lackluster performance in recent
months. When Pershing Square first disclosed its Valeant position
last year, shares traded at nearly $200 and the stake was worth
about $4 billion. Wednesday, Valeant's shares closed at $33.54,
valuing the stake at about $1.03 billion, according to FactSet.
The fund also has suffered big losses on its investment in
Herbalife Ltd.
As for Mondelez, Pershing Square last year built up its stake,
which included options and forward contracts, in the maker of Oreo
cookies and Ritz crackers. As of Dec. 31, the fund owned 43.4
million shares, according to FactSet.
Mr. Ackman added Wednesday that Mondelez remains the fund's
largest exposure, and it has no current plans to sell any of its
other investments. He said Pershing Square continues to believe in
the potential for operating improvements and margin expansion at
Mondelez that will lead to further increases in value.
Write to Lauren Pollock at lauren.pollock@wsj.com
(END) Dow Jones Newswires
March 16, 2016 18:45 ET (22:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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