Some good timing on Bowne…
On Tuesday, after the market closed, Bowne & Co. (BNE) announced that it was being acquired by RR Donnelly (RRD) for $481 million, or about $11.50 a share. Given that Bowne stock closed at $6.97 on Tuesday, there were no doubt some smiles on a few investors’ faces over the news.
Given this, we decided to go back and look at some of Bowne’s recent filings and we weren’t all that surprised to find a number of large funds that seem to have piled in to Bowne in a very large way — filing 13Gs, the form required when the position exceeds 5% — with near-perfect timing (Please see correction to this post below). Indeed, we counted four funds that filed 13Gs since the beginning of this month: Robeco Investment Management, Capital World Investors, Lord Abbett, and Steinberg Asset Management. Two other large funds — Dimensional Fund Advsiors and Wellington Asset Management — recently added to their positions in Bowne, according to the filings. BlackRock (BLK) also disclosed a new position in Bowne, though that was almost certainly due to the Friday night dump we footnoted earlier this month that was related to the acquisition of Barclay’s Global Investors.
A quick scan of Steinberg’s most recent 13F, which was filed just last week, shows that the stake in Bowne was worth just shy of $13 million on Dec. 31 at the time of the filing on Feb. 16. It’s not clear from the filings what the cost-basis was so it’s impossible to calculate the exact return, but given the sharp appreciation in the stock as a result of the M&A news we’re pretty sure that whoever made that decision to pile into Bowne in such a large way received a hearty congrats on Tuesday afternoon.
CORRECTION: As an anonymous commenter points out, I got the filing requirements for 13Gs and 13Ds mixed up in my head. As a result, the fact that four 13Gs were filed in February isn’t so unusual since the rules say that new 13Gs must be filed 45 days after the calendar year in which the position was established (which kind of makes them useless in my book, but that’s a different story!). As the commenter suggested, I went back and pulled the 13Fs for the four funds and found that 3 of the 4 started buying shares of Bowne during the quarter ended Sept. 30, 2009. The fourth fund — Lord Abbett — has had a position in Bowne since the end of December 2008. I apologize for this error and very much appreciate the anonymous person who brought it to my attention.
Image source: Angela Rutherford
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Posted in Tags: 13F, 13Gs, M&A |
 7 Comments » |
February 25th, 2010 at 12:57 pm
Interesting. At last count there were 5 of those shareholder law firms with news
releases about the deal. Usually 1 or 2. 5 in same afternoon is fast. Must feel there are some burned bagholders who’d stand for some court action. All 5 with the usual weasel word “investigation” – possible breaches of fiduciary duty and other violations of state law. Complaints like Company didn’t shop around enough for better price and all that typical dribble that either never gets to court or if so is thrown out.
Guess there’s a shortage of ambulances due to show day.
February 25th, 2010 at 1:01 pm
I have no idea but is a score of 4 13Gs a month particularly above average for an oft-rumoured target stock?
Perhaps it is, in which case the point is valid, but you should state that rather than just say “a number of funds… …with perfect timing.”
Also, how many funds crossed the other way and went under 5% with less than perfect timing?
To insinuate a smoking gun you need to give us a baseline!
February 25th, 2010 at 2:45 pm
@TinyTim: Looking back at all the 13G filings for Bowne, there was only 1 new filing for all of 2009, so four in the same month seems a bit of a statistical anomaly. There were also 4 amended 13Gs in 2009.
I never meant to imply a smoking gun — that’s not the job of footnoted. But it certainly seems like a a curious coincidence.
March 1st, 2010 at 10:36 am
OK that is for sure a smoking gun! Wow…
March 1st, 2010 at 1:47 pm
Unless they hold over 10% of the oustanding shares, persons eligible to file on Schedule 13G are only required to do so within 45 days after the end of the calendar year in which they crossed the 5% threshold. Accordingly, this “near-perfect timing” suggests only that these investors were complying with the SEC filing deadline, and says nothing about the timing of their acquisitions of Bowne shares.
Some digging in their Form 13Fs probably would give you a better clue about their timing, but I’d guess all of them had invested before any serious M&A discussions began.
March 2nd, 2010 at 12:52 pm
It’s always nice to hear from footnoted readers who are smarter than me, especially when it comes to filings that I don’t read too often. I did confuse the rules on 13Gs and 13Ds here and have corrected the post to reflect that. I also went back and looked at the 13Fs for these four funds and found that three of the four funds bought the stock sometime during the third quarter of 2009. Only Lord Abbett has held shares since December 2008.
March 4th, 2010 at 7:07 pm
“Unless they hold over 10% of the oustanding shares, persons eligible to file on Schedule 13G are only required to do so within 45 days after the end of the calendar year in which they crossed the 5% threshold.”
So the 13Gs that are filed throughout the year are for transparency? Why doesn’t everyone just file between Jan 01, YYYY and Feb 15, YYYY of the following year?
Sorry if it’s a basic question, but I’m learning SEC forms, (and how to analyze them).