Tuesday, 21 October 2014
Last updated 4 hours ago
Oct 24 2006 | 12:08pm ET
It’s hedge fund versus hedge fund as Highland Capital Management seeks to derail what it calls preferential treatment accorded New York-based MHR Fund Management.
In a letter to a special committee of Loral Space & Communication’s board of directors, J. Kevin Ciavarra, general counsel at Dallas-based Highland, which owns more than 5% of Loral, calls the terms of a proposed $300 million sale of convertible perpetual preferred stock to MHR – Loral’s largest shareholder – “a magnet for private and governmental scrutiny and stockholder litigation.” Highland has, in turn, offered to purchase the shares on terms it calls more favorable.
“In this transaction, it appears that, as Loral’s largest stockholder, MHR is using its insider position to enrich itself to the detriment of Loral and other stockholders,” Ciavarra wrote. He went on to say the deal “reeks of self-dealing, self-interest and is contrary to established market principles of fairness. That [the special committee] have associate yourselves with this questionable transaction by approving it under a cloak of ignorance would make you equally culpable.”
According to Highland, the coupon, conversion price and perpetual nature of the stock sale are contrary to typical market terms. The firm also decries the awarding of an additional board seat to MHR, and accuses Loral of failing to offer the securities to other large shareholders.
Highland is offering to underwrite the $300 million deal with a lower coupon, higher conversion price or both, and said it would offer shares to all large Loral shareholders, except MHR.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...