Activist Elliott Takes Stake in PulteGroup
June 07 2016 - 6:00PM
Dow Jones News
Hedge fund Elliott Management Corp. has taken a stake in home
builder PulteGroup, which in recent months has been embroiled in a
battle between its founder and chief executive over the company's
future.
A Pulte spokeswoman confirmed that Elliott Management has taken
a position, though she didn't specify the size of the stake.
In a statement, the company said "we welcome dialogue with all
of our shareholders." A spokesman for Elliott Management declined
to comment.
The move by the activist hedge fund marks the latest twist in a
saga that began with a public spat between PulteGroup founder
William J. "Bill" Pulte and chairman and chief executive Richard
Dugas two months ago.
Amid pressure from Mr. Pulte, who is the company's largest
shareholder, Mr. Dugas announced in early April he would be
retiring next year. But Mr. Pulte continued to demand Mr. Dugas's
immediate resignation, arguing to board members and shareholders in
a series of letters that PulteGroup's stock performance and sales
volume have lagged behind rival home builders throughout the
housing recovery.
Shareholders re-elected Mr. Dugas as chairman and chief
executive, along with the entire board, at the company's annual
meeting in May.
Mr. Pulte couldn't be reached for comment. His grandson, also
William J. "Bill" Pulte, declined to comment on the Elliott
Management stake.
Jack Micenko, an analyst with Susquehanna Financial Group, said
the founder and grandson have been speaking with institutional
investors over the last month and he believes "their message is
beginning to resonate with folks."
"It's clear they're not going away any time in the near future,"
Mr. Micenko said. "That's the one thing I'm absolutely sure of as I
come out of these meetings."
He said the two men are pushing for a new chief executive and a
shake-up of the company's board that would involve bringing on
people with more experience in the home building business.
In a research note last month, Mr. Micenko noted that the Pulte
family had hired a proxy advisory firm, Okapi Partners, and that
representatives of the firm were in attendance at his meeting with
them.
Michael Fein, a senior managing director at Okapi Partners, said
the firm isn't currently soliciting on behalf of the Pultes but
they have attended meetings with other shareholders. He declined to
comment further.
Elliott Management last year took a position in struggling
outdoor recreation retailer Cabela's. It also had a stake in
computer data and security company EMC Corp. before it was acquired
by computer maker Dell Inc. last year.
Write to Chris Kirkham at chris.kirkham@wsj.com
(END) Dow Jones Newswires
June 07, 2016 17:45 ET (21:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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