Elliott Management’s Activist Campaigns: The Special Situations Report

In this episode of the Special Situations Report, Asif Suria from Inside Arbitrage shares his expert insights on:

Elliott Management's battle with Emerson Electric (EMR) to get a higher price for Emerson's $265 per share all cash acquisition of Aspen Technology (AZPN)
United Rentals' (URI) decision to voluntarily pull and refile the HSR notification related to its acquisition of H&E Equipment Services (HEES)
Several new M&A announcements including the $4.4 billion all cash acquisition of SolarWinds (SWI) by Twin/River Capital for $18.50 per share
A potential deal for Playa Hotels & Resorts (PLYA) by Hyatt Hotels (H) (confirmed this morning)
Steel Connect's $10.18 per share non-binding proposal to acquire DMC Global (BOOM). The stock was trading at nearly half the price of Steel Connect's original offer of $16.50 per share
Honeywell's (HON) decision to split into three separate companies including Honeywell Automation, Honeywell Aerospace and Advanced Materials
Mithaq Capital doubling down on its investment in Children's Place (PLCE) by participating in a rights offering and converting debt to equity
Director Nik Mittal's first insider purchase of JetBlue (JBLU)
CEO's Tom Gayner's insider purchase of Markel (MKL)
Large stock buyback announcements at Jacobs Solutions (J), PayPal (PYPL) and Fortune Brands Innovations (FBIN)
Zillow's ex-CEO Spencer Rascoff stepping in as the new CEO of Match Group (MTCH)
Massive C-suite shakeup at Oscar Health (OSCR)
Joakim Weideman is stepping into the role of CEO at Johnson Controls (JCI) next month

Transcript of the Special Situations Report on Elliott Management's Activist Campaigns

Asif Suria
Hello and welcome to the Special Situations Report, a podcast by Inside Arbitrage covering the most intriguing event-driven activity over the past week. In this podcast, we'll dive into the latest M&A activity, upcoming spin-offs, significant buybacks, unique insider buying, activist campaigns, and a whole lot more.

Tamanna Suria
My name is the Tamanna Suria and I currently attend the University of California, Los Angeles.

Asif Suria
We will briefly cover Elliott Management's opposition to an announced deal by Emerson to acquire Aspen Technology, the acquisition of network and database monitoring company SolarWinds, Hyatt entering into negotiations to acquire Playa Hotels & Resorts, Honeywell's decision to follow the GE Playbook and split into three companies, Mithaq Capital, a company with ties to a Saudi banking family, increasing its stake in Children's Place and a whole lot more.

Tamanna Suria
Before we begin, it's important to state that this podcast is for general informational and educational purposes only. The content does not constitute financial, investment, legal, or tax advice. We do not warrant the completeness or accuracy of the content or data provided in this podcast. Nothing discussed in this podcast should be interpreted as a recommendation to buy, hold, or sell any investment or security. Investing involves substantial risks, including the potential loss of principal. You should conduct your own research and due diligence before making any investment decisions.

Recent M&A Activity, Potential Mergers & Acquisitions and Activists

Asif Suria
Let us start this episode with merger arbitrage and a couple of updates around announced mergers and acquisitions. Elliott Management appears to be gearing up for a fight to get a higher price on an announced acquisition. In our last episode, we discussed the acquisition of Aspen Technology, an enterprise asset performance management company by the engineering giant Emerson Electric for $265 per share in cash. This deal was in the works for a while. It was originally supposed to be for $240 and Aspen was able to negotiate a higher price. Elliott management, who is a minority shareholder in Aspen Technology, came out against the deal last week and said that this $265 price undervalues Aspen.

Tamanna Suria
Quite frankly, it feels like we're talking about Elliott management and some new activist campaign they've started almost every single week. In our very first episode, we talked about Elliott's involvement with the budget airline Southwest. And in our most recent episode, we talked about Elliott pressuring Western Digital to spin off one of their (divisions). In fact, two episodes ago, we were discussing GE and its various spinoffs and brought up Elliott's letter to Honeywell encouraging them to split up the business in a similar fashion.

Keep that bit in mind, as there's been a new development in the Elliott – Honeywell situation, which we'll discuss later in this podcast.

Asif Suria
Yeah, getting back to Aspen, Elliott holds a $1.5 billion stake in Aspen Technology, representing nearly 10% of their shares outstanding. In response to this opposition, the spread of the deal, which was almost 0%, turned into a negative 3.37% spread, as shareholders are now expecting Emerson to once again increase what they were willing to pay for Aspen.

As we noted earlier, the original price at which they started negotiating with Aspen was $240 per share, and Emerson already held a certain stake in Aspen. And basically through this deal, they tried to buy the rest of their stake.

Tamanna Suria
Let's cover another update in the M&A world. Regarding the acquisition of H&E Equipment Services by United Rentals, they decided to pull and refile their notification under the HSR Act. Typically, when a company files under the HSR Act, there's a 30-day waiting period. And if that waiting period expires, then the deal can proceed.

In the case of cash tender offers the HSR waiting period is just 15 days. Voluntarily pulling and refiling the HSR gives regulators more time to look into the deal as it resets the clock. The new expiration date for the H&E Equipment Services Deal is February 18th. The spread on the deal is 4.33%, but considering the deal is expected to close in Q1 of this year, that works out to an annualized return of 30%.

As we have been saying for a few weeks now, the annualized return right from the beginning pointed to this deal facing regulatory scrutiny and it taking longer than the end of Q1 for the deal to close. While the new expiration date is February 18th, we wouldn't be all that surprised to see the deal get extended once more.

Asif Suria
Getting to new mergers, the largest announcement last week was a $4.4 billion acquisition of SolarWinds by Turn/River Capital in an all cash deal for $18.50 per share. The timing is interesting considering that DOJ recently sued to block the Juniper Networks – HPE deal.

I'm not sure if you recollect, but just a few years ago, SolarWinds was hit by a sophisticated cybersecurity breach. Russian foreign intelligence service hackers injected malicious code into SolarWinds software updates, which were then distributed to customers. 18,000 SolarWind customers were impacted, including government agencies like the Homeland Security Agency and a large number of companies like Microsoft, Intel, and Cisco.

The SEC eventually charged SolarWinds and its Chief Information Security Officer with fraud for failing to disclose known security breaches.

Following the discovery of these breaches in December 2020, the stock went on to lose nearly a third of its value that month.

Tamanna Suria
Despite all that controversy, Turn/River Capital is paying a 28% premium to the 30-day average price to acquire SolarWinds, but even with this premium paid, SolarWinds is still below where it was before the security breach was disclosed. This is very different from CrowdStrike holdings, which saw its stock recover entirely despite the massive disruption their software updates caused last year.

Asif Suria
I remember how disruptive that outage was. If I remember correctly, Delta Airlines had to ground all its flights, and they were thinking about suing CrowdStrike because of all the disruption that outage caused.

There were a few other deals announced this week that we'll cover quickly. Altus Power was acquired by a division of TPG for $2.2 billion in cash. Altus is a clean energy company focusing on solar generation, energy storage and EV charging. TPG paid a premium of 26% and about 22 times EBITDA for the deal. However, this deal was also rumored to occur in December and the price after the rumor came out was $4.08. I believe the deal announced is an all cash deal for $5 per share. So even after the rumor came out, there was quite a bit of profit to be had for anyone that felt like this deal might actually materialize.

Tamanna Suria
We also had a small deal with Globus Medical buying Nevro for $250 million in an all cash deal. This is the second medical devices deal this year after Stryker decided to buy Inari last month. Nevro has devices that help with chronic pain and one of the ways that they do this is by spinal cord stimulation. Both Altus Power and Nevro are supposed to close by the middle of this year and their expected annualized returns are around 6%.

Asif Suria
That spinal cord stimulation part sounded really interesting because I've come across TMS or transcranial magnetic stimulation where they use magnetic pulses to stimulate neurons for patients that might have depression or anxiety. So this is interesting to see.

The other thing we wanted to talk about is the acquisition of Triumph Group in a $3 billion all cash deal by Warburg Pincus and Berkshire Partners. The spread on the deal is about 3.59% right now. The acquirers paid a nearly 40% premium and about 18 times EBITDA for the deal. When I first heard Triumph, the motorcycle company came to mind, but this Triumph is the aircraft parts manufacturer. By looking up the Triumph motorcycle company, which this deal is not about, it was interesting to read that British billionaire John Bloor bought the company for just 150,000 pounds in bankruptcy. He then spent many years and several hundred million dollars getting the company ready to come up with a whole new line of motorcycles. And he spent eight years without releasing a product and then to great success, they had a whole new era for Triumph motorcycles.

Tamanna Suria
Last but not least let us wrap up our merger arbitrage section with the saga that never quite seems to end. The deal between US Steel and Nippon Steel. This week, both companies jointly filed their opening brief in their action against former President Biden and his political appointees at the Committee on Foreign Investment in the United States, better known as CFIUS.

This deal has been quite contentious and unusual from the start, but seeing the company sue Biden's political appointees was especially interesting to see. The CEO of US Steel met with President Trump last Thursday, but it is unclear if that will have any impact on the deal. At one point on Friday, US Steel saw its stock jump up by more than 4%.

Asif Suria
Let's switch gears now and talk about pre-deal situations. We also track pre-deal situations, or as we like to call them, "Deals in the Works". And in that sphere, we saw that this week Hyatt Hotels is in negotiations to acquire Playa Hotels & Resorts. They were already in negotiations, and they extended the timeline of those negotiations to give them a few more days to potentially ink a deal.

Hyatt already owns almost 10% of Playa. And if a deal materializes, it would be surprising because just like Hilton and Marriott, who own less than 10% of their hotels, Hyatt was also moving to a more asset light model where owners pay them for the use of their brand. So they were moving more to a licensing model that is more profitable.

Playa stock jumped a lot in December when news of this potential deal first broke and their period of exclusivity was extended until February 10th. Playa, which operates beachfront resorts in Jamaica, the Dominican Republic and Mexico, has a market cap of around $1.6 billion and is about the same size as PebbleBrook Hotel Trust, a company we first wrote about last August and then I discussed on Andrew Walker's podcast, Yet Another Value Podcast in December.

Tamanna Suria
One thing I do want to point out is that there is one big difference between Pebblebrook and Playa, that being that Pebblebrook is a REIT while Playa is not. That difference is best seen in the company's dividends. REITs are required by law to distribute at least 90% of their taxable income to shareholders, often in the form of dividends. Pebblebrook did cut its dividend during the pandemic, but it still has a dividend yield of roughly 0.31%. Playa, on the other hand, has no dividend whatsoever.

Asif Suria
I'm certainly hopeful that Pebblebrook will bring back their dividends now that they're done with their capital expenses and investing cycle. But that still remains to be seen.

Last Friday, we also saw news about Steel Connect once again making a non-binding offer to buy the rest of DMC Global, a microcap company that makes building products, detonation related products for the oil and gas industry and explosion welded clad metal plates. This time around, Steel Connect is offering $10.18 per share and the stock closed at $7.92. This isn't the first time Steel Connect has made a non-binding proposal. They initially offered $16.50 per share last June and the board rejected the offer.

The fact that the stock is worth less than half that original offer price reminds me of Five9 rejecting an offer from Zoom in September 2021 for $14.7 billion, valuing that stock at around $200 per share. Five9's stock closed at $41 last Friday. While that seems like quite a bit of a loss of value for Five9 shareholders who rejected the Zoom deal, the company that takes the cake for rejecting an extremely generous offer is Groupon.

Before Groupon went public, Google had offered $6 billion for the company and they turned it down. The company now has an enterprise value of just $540 million and the stock is down 98% since it started trading as a public company.

Stock Spinoffs

Tamanna Suria
Remember how I said earlier in this episode that I wanted to keep the Honeywell and Elliott situation in mind since we will discuss it in a bit? Well, that time is now. Last week, Honeywell, the multinational industrial conglomerate, finally committed to the full playbook Elliott was asking them to adopt in their November 2024 letter to the company. In that letter, Elliott mentioned that Honeywell has 12 different public reporting lines, each of which could be a large standalone public company, especially considering that Honeywell maintains more than 700 different sites with nearly 100,000 employees in about 80 countries. Elliott also mentioned that even though Honeywell generates 40% of its revenue and 45% of its segment profit from its aerospace division, they only have one board member with aerospace experience.

Asif Suria
We should probably rename this show the Elliott Management Tracking Show. Elliott not only referred to GE's successful spin-off, but also called out how United Technologies spun out Carrier and Otis in 2020 before merging into and with Raytheon. As you know, we track the performance of both the spin-off and the parent after the spin-off occurs in our list of completed spin-offs.

Since that spin-off, Otis is up 109%, Raytheon is up more than 180%, and Carrier, their HVAC and AC division, is up a whopping 430%.

Tamanna Suria
Honeywell already announced plans to spin off its Advanced Materials Division last October, but they updated the plan last week to indicate that they will be separating into three companies. The largest division with $18 billion in sales will become Honeywell Automation. The second largest company to be spun out of Honeywell will be Honeywell Aerospace, with $15 billion in sales, and the third company would be Advanced Materials. They expect to complete the spin-off of advanced materials towards the end of this year or early 2026, and the aerospace and automation companies will be separated in the second half of 2026.

Asif Suria
This situation is actually quite interesting for me personally, and I'm going to be following it very closely. In the case of GE, I invested right before the GE Vernova, their power division was spun out and more recently I also invested in Western Digital before they spin off their flash division. So I might look into potentially exploring this opportunity and investing before the three companies are split, because often you end up realizing quite good value in these situations if you invest pre-spin-off, but every situation is different.

Insider Buying

Let's switch gears a little bit, and we'll talk about insiders, or rather legal insider purchases. Was it just a couple of weeks ago when we were talking about buying by insiders of biotech companies? That changed in a hurry. So a couple of weeks ago there was significant insider buying by biotech insiders. Last week, we saw significant insider buying by bank insiders including a director of Texas Capital Bankshares who consistently keeps buying preferred shares of the bank which are trading at a nearly 15% discount to their par or face value of $25. I see him buying roughly in the $21 price range.

Tamanna Suria
Despite the influx of Bank Insiders purchasing shares this week, it's nowhere near the levels of purchases by Bank Insiders we saw shortly after the failure of Silicon Valley Bank.

The weeks after, banking stocks across the board took a large hit and we'd see up to 80 insider purchases in a day with more than half being from banking insiders. Now, the insider purchase that we want to discuss this week is not your typical insider purchase as we usually skip insider purchases by 10% owners. However, we do cover especially noteworthy cases as is the case with former Treasury Secretary Steven Mnuchin buying Lions Gate, Warren Buffett buying Occidental Petroleum or Bill Ackman buying Howard Hughes.

Asif Suria
The interesting thing about all three of them is each of those bets are still to pay off. But I'm hopeful they will because I have positions in at least two of those. Getting back to the insider purchase, we want to actually talk about, almost exactly a year ago, the retailer Children's Place reported disappointing quarterly results and the stock dropped sharply to a low of $8 per share. It was at this time that Mithaq Capital began to purchase shares. Mithaq Capital is the investment firm of the wealthy Saudi Al Rajhi family who made their fortune through their ties to one of the largest banks in Saudi Arabia.

Through a series of transactions from February 9th of 2024 onwards, the Al Rajhi family continued to purchase shares of Children's Place and eventually ended up with a 54% ownership stake in the company. And they managed to this when the stock was extremely volatile and up and down double digits every day.

Tamanna Suria
Fast forward a year and the stock was up double digits once more last week because Mithaq Capital increased their stake by participating in a rights offering by the company that expired on January 31st, 2025. This time around, they purchased a little over 6.7 million shares at a price of $9.75 per share, pushing up their stake to over 12 million shares.

Asif Suria
So why is this super interesting? The highly volatile stock, which had jumped to as high as $38 per share in mid February last year was down to just $4.77 just a few months ago. In mid-january there were nearly 3 million shares short. In the last 10-Q, the company revealed that it has 12.8 million diluted shares.

A little over 9 million shares were issued in the offering at $9.75 per share. So this implies that now Mithaq owns 62% of Children's Place stock and could decide to acquire the rest of the company and take it private.

Tamanna Suria
Mithaq actually only paid about $5 million in cash for their new stock. $60 million was covered through debt that Mithaq had previously extended to Children's Place. While all signs do point to a potential acquisition of Children's Place by Mithaq Capital, we had the exact same hypothesis over a year ago, and it still hasn't played out, so the situation remains pretty uncertain.

Asif Suria
That being said, Children's Place received almost $30 million in cash from this rights offering and will use 80% of it to pay down debt outstanding through its revolving credit facility. The balance sheet is still quite leveraged. So they have nearly half a billion dollars of net debt outstanding as of the end of the last fiscal quarter. With this debt repayment of about $84 million, they most likely will still have about $400 to $440 million of debt.

We will learn more about the company after it reports Q4 results next month.

Tamanna Suria
The other interesting insider purchase from last week was by director Nik Mittal, who holds both a joint MBA and JD degree from NYU, where he also served as an adjunct professor for a couple years. Mr. Mittal has an impressive background, especially considering that he spent over 12 years at the activist investment firm Jana Partners. He now serves as the managing director of Molecule Ventures, a firm focused on the environmental markets.

All that background aside, we were quite interested to see Mr. Mittal's purchase of 100,000 JetBlue shares at an average price of $6 roughly per share.

Asif Suria
Mr. Mittal has been on JetBlue's board for nearly two and a half years, and this is the first time he's buying shares. We pay special attention to this purchase as it fits our criteria of independent directors with investment backgrounds buying shares. Unfortunately, due to its failed pursuit of Spirit Airlines, JetBlue hasn't participated in the big rally in airline stocks over the last year that saw Delta Airline's stock jump up 70%, Alaska Airlines posted a gain of over 110% and United Airlines catapulted 164%. I guess investors in airline stocks didn't get Warren Buffett's memo about investing in airlines based on how often he's lost money every time he tried to invest in airlines.

Tamanna Suria
The last insider purchase that caught our eye was filed after the market closed last Friday and was a $200,000 purchase of Markel by the CEO Thomas Gaynor.

This is the first time Markel stock has crossed the $2,000 threshold, and it is interesting to see that he continues to buy, especially considering the stock has already appreciated by 30% since his last purchase in November of last year.

Asif Suria
As you know, Markel is often compared to Berkshire Hathaway because they have an insurance arm just like Berkshire Hathaway has GEICO and like Berkshire Hathaway, they tend to invest the float from the insurance division in both public and private companies instead of staying conservative and parking it all in bonds or other safe alternatives. Markel also has a venture capital arm.

I got a chance to attend the famous Markel brunch that is held the day after the Berkshire Hathaway meeting for the first time last year and met ton of interesting people, including the author William Green. I look forward to going to the Merkel Brunch once again this year.

Tamanna Suria
Actually, this year will be my very first time attending Berkshire Hathaway, so incredibly excited for that as well. That all being said, let's move to some of the standout buybacks this week.

Stock Buybacks

The engineering services company, Jacobs Solutions, just announced a $1.5 billion buyback representing 9% of the company's market cap at announcement. Jacobs spun off its critical mission solutions and intelligent government services business last September in a Reverse Morris Trust transaction. In a Reverse Morris Trust transaction, the company takes the division it wants to spin off and merges it with an existing company. In this case, the company that was created was Amentum Holdings. A more well-known Reverse Morris Trust transaction would be Pfizer spinning off its upjohn business and merging it with Mylan to form the generics and specialty pharmaceutical company, Viatris.

Asif Suria
Yeah, I remember that Reverse Morris Trust transaction quite well. Initially I was interested in investing in that, but then when I noticed how much debt Pfizer was spinning off into Viatris, I decided to hold back.

Let's switch gears and talk about another buyback announcement. PayPal announced a new CEO appointment in August 2023, and since Alex Chriss took the top spot about a month later, the stock was up almost 50%.

However, PayPal saw its stock drop from $90 to just under $78 in a single day last week after they reported Q4 earnings that beat estimates and provided strong 2025 guidance. So if they beat estimates and provided strong 2025 guidance, why would the stock drop?

The stock was down because of pressure they were seeing in their Braintree division. This is the division that provides white label or unbranded checkout options to other retailers and e-commerce companies, and competes with companies like Stripe and Adyen.

At least this pullback allows PayPal to execute on its massive new $15 billion buyback that represented 19% of its market cap at announcement. The company was already buying back stock and in the last four years has retired 14% of its shares outstanding. This includes buying back $6 billion of stock just in 2024. The stock is trading at about 12 times free cash flow, and I can see why management wants to deploy an additional $15 billion to buyback stock.

Tamanna Suria
The third and final large buyback announcement we want to discuss today is a $1 billion buyback by Fortune Brands, which represents nearly 12% of the market cap at announcement. Fortune Brands owns brands like Yale Locks, consumer faucets like Moen, and luxury bathroom fixtures like House of Rohl. They spun out their cabinet's division, called Masterbrand, in December 2022 and renamed themselves Fortune Brands Innovations.

In the two short years, Masterbrand has been public, the stock is up more than 116%. However, the parent, Fortune Brands, didn't do quite as well and is only up 19% since that spinoff. Fortune Brands Innovations has been buying back stock and has retired 11% of its shares outstanding in the last four years.

Asif Suria
I guess there's probably a whole lot more demand for cabinets than there is for bathroom fixtures. Let's see what happens going forward.

Management Transitions

Let's wrap up our episode today with a discussion of C-suite transitions. The dating app company Match Group, which owns the brand's Tinder, OKCupid, Match, Plenty of Fish, and a whole lot more, has had a difficult time the last few years in finding a good match when it comes to both investors and CEOs.

IAC spun off its remaining stake in Match in July 2020. After some initial excitement, which saw Match's stock more than triple in price from $50 in mid 2020 to more than $175 by late 2021, the bloom was off the rose with the stock down more than 55% over the last five years.

It is currently trading at around $35 per share after multiple quarters of shrinking revenue growth. It wasn't just the investors that dumped Match, but the C-suite was also a revolving door.

Tamanna Suria

Sharmistha Dubey who was Match's CEO after the IAC spinoff left in mid-2022. She was replaced by Bernard Kim, who came over from the mobile gaming company Zynga and lasted less than three years. He left in what we like to call a sudden departure, when the public announcement and the effective date of departure are less than 30 days apart.

Asif Suria

The new CEO who is going to lead Match as a name that is familiar to us. Spencer Rascoff was one of the co-founders of Zillow and was the CEO of the real estate platform for almost 10 years before the other co-founder, Rich Barton, came back to Zillow as its CEO in 2019. I've often followed insiders at Zillow including Jay Hoag, who is a director both Zillow and Netflix, as well as Rich Barton, purchase stock of Zillow at the exact right moment. And I followed them into the stock. So as a Zillow shareholder back then, I was very glad to see that Rich Barton decided to exit their home flipping business in 2021, a little over three years after it was launched. His timing of exiting that home flipping business was impeccable as companies like Redfin that followed the same strategy later on took large losses from that business.

Tamanna Suria
Getting back to Spencer Rascoff, he had previously founded the travel company Hotwire and sold that to IAC for $685 million. Match is giving him a generous pay package to help turn the company around, including $800,000 in base pay, a discretionary cash bonus that is 200% of base pay, $7.2 million in restricted stock units, $10.8 million in performance stock units, an additional $30 million in performance stock units.

Asif Suria
If that was not enough, unless I'm reading the employment agreement incorrectly, for the fiscal year 2026, he's supposed to receive no less than $12 million of some combination of restricted stock units and performance stock units.

With this kind of money on the line and the guidance they have provided for 2025, we're likely to see the impact of Spencer Rascoff's turnaround in the second half of 2025. And just looking at what he's done since he left Zillow and the number of companies he's been involved with, I think he's going to bring a lot of energy to Match and finally Match might start seeing more investor interest in it.

Tamanna Suria
This week also brought with it a massive C-suite shakeup at Oscar Health. Oscar Health is actually a company we're quite familiar with. We last featured it as a spotlight idea for a December 2024 monthly newsletter.

Oscar Health is a mid-cap technology-driven health insurance company founded by Joshua Kushner, Mario Schlosser and Kevin Nazemi. The general public may recognize Joshua Kushner as the brother of Jared Kushner, son-in-law to President Trump.

Asif Suria
Oscar was first brought to our attention after a series of insider purchases in November of last year, totaling roughly $20 million by Joshua Kushner through his VC firm Thrive Capital. These purchases came at a time when every single insider in the company was selling shares, especially considering the 86% run up in Oscar's stock over the last year at that point in time.

Tamanna Suria
When looking at Oscar's leadership team, we were quite impressed. One of the co-founders, Mario Schlosser, remains the CTO of the company and had previously been CEO, but was replaced by Mark Bertolini.

Mark Bertolini is a veteran in the healthcare industry. He worked at the healthcare insurance giant, Aetna, for nearly 16 years and eventually served as the company's chairman and CEO. He stepped down from that role in November 2018, following CVS Health's $69 billion acquisition of the company, one of the largest healthcare insurance deals in M&A history.

Asif Suria
Which is why this week we were quite surprised to see a number of C-Suite transitions at Oscar Health. Oscar's Chief Insurance Officer will be departing the company altogether after a month. The COO resigned suddenly and the company's Chief Legal Officer is transitioning to the role of EVP of Public Affairs.

Oscar hired a new Chief Legal Officer and also hired Janet Liang from Kaiser Foundation Hospitals and Health Plans to be EVP and President of Oscar Insurance. Ms. Liang will be responsible for overseeing the company's insurance and operations functions and has also been designated as the Principal Operating Officer, essentially replacing the Chief Insurance Officer and COO roles.

Tamanna Suria
These transitions came as a bit of a surprise, especially considering Oscar Held's full year 2024 earnings just came in and looked quite positive. Revenue was $9.2 billion, a 56% increase year over year, and the company finally flipped to being profitable, recording a net income of $25.4 million.

It'll be interesting to see if anything comes out in the next few weeks that would give us a little more insight into these rapid executive level changes at the company.

Asif Suria
Our last C-suite transition is definitely a simpler one. Johnson's Controls International, a conglomerate that produces fire, HVAC, and security equipment for buildings, just announced that, I'm going to likely butcher this name, Joakim Weidemanis will join the company as CEO, effective March 12, 2025.

Mr. Weidemanis will be replacing the current CEO George Oliver, who was with the company for over seven years and announced his retirement plan in July of last year. He stayed on as CEO of the company until a new CEO was found and will remain Chairman of the company until July 2025.

Tamanna Suria
We found the C-suite transition interesting considering that Mr. Weidemanis has spent over seven years at Danaher Corporation, a life sciences and diagnostics innovator. Investors familiar with GE may recognize Danaher as the current CEO of GE, Larry Culp, spent over 13 years as the CEO of Danaher.

Asif Suria
I heard a hedge fund manager mention that if you were to track the number of CEOs that have come out of Danaher and how well they've gone on to do at different companies, it's quite fascinating. This reminds me of maybe two or three decades ago, people who were trained at GE and would come out of GE would go on to do very well at other companies.

Tamanna Suria

And that wraps up this episode of the Special Situations Report. What we've covered today is just a brief overview of the special situations landscape. So if you'd like to access a more comprehensive weekly overview of all event-driven activity, go ahead and visit our website, TheSpecialSituationsReport.com. For daily updates and alerts on the special situations world, as well as access to tools to help you identify opportunities, such as the merger arbitrage tool, check out InsideArbitrage.com.

Asif Suria
And if you enjoyed this podcast as much as both of us did recording it, please take a moment to like and subscribe on whatever platform you may be listening on and especially share it with your friends who are interested in either special situations or event-driven investing. Thank you!

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Elliott Management's Activist Campaigns: The Special Situations Report