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CIAM has high hopes for Sky

by Justine Crestois

European activist fund CIAM is invested in Sky and believes the company is worth 17 pounds per share, CEO Catherine Berjal told has told Activist Insight Online.

The merger arbitrage specialist bought shares when they were trading at around 9 pounds per share, Berjal said. Although known for litigating buyouts it believes undervalue target companies, CIAM is taking a passive approach in this case, allowing other shareholders to argue for a better price.

A recent Takeover Panel decision set a floor price of 14 pounds after hearing arguments from Elliott Management and other shareholders arguing for a higher amount but CIAM did not expect that process would prove crucial to the outcome. “There’s an open auction, and that’s what we like,” Berjal told Activist Insight Online.

Sky shares breached 10 pounds per share in December 2017 and have not dropped significantly below that level this year, due to a bidding war between Comcast and Twenty-First Century Fox.

On Thursday, the stock closed at 15.80 pounds, after it was revealed Fox and Comcast would square off in an auction for the broadcaster.

Activist Insight Online understands that CIAM owns around 3 million shares in Sky, or a 0.2% stake.

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Deal Chasers

Activist Insight
March 2017

"CIAM is a rare French activist investor, and a rare example of a hedge fund run by two women. It made its name waging campaigns at Paris-listed companies in merger arbitrage situations, and now prepares to target new countries across Europe. "

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CIAM ready for legal battle against SFR buyout

Activist Insight

Paris-based hedge fund CIAM has told Activist Insight that they will watch closely the French market regulator's decision on Altice's bid to acquire complete control of telecoms company SFR. Last week, the investment firm sent a letter to the AMF (Autorité des marchés financiers) saying that there were irregularities in Altice's offer, and asked the regulator to intervene. In a Wednesday interview, the investment firm's co-founder Anne-Sophie D'Andlau said that, whatever the AMF's decision, they "will not let it go." "Several minority investors have called us after the letter. They called from France, from the rest of Europe, and even from America. There is a high level of discontent. We are ready to go down the legal route if necessary," she said. A decision by the AMF on Altice's all-stock tender offer for the 22.3% of the SFR's shares it does not already own was expected for Tuesday. However, the regulator delayed the decision by at least two weeks. Altice's bid was submitted earlier in September, and valued SFR's stock at 24.72 euros - a 2.6% premium to the unaffected price. CIAM believes that Altice wants to "squeeze the minorities out." To take the company private, the bidder needs to gain control of 95% of the outstanding shares. In its letter to the AMF, CIAM claimed that a report by an independent expert hired by SFR to evaluate the deal was clearly biased. In addition, CIAM believes that the SFR independent directors who supervised the adviser's work were not really independent. Merger arbitrage lists among the main strategies adopted by CIAM. Around a quarter of the hedge fund's portfolio is dedicated to bids that undervalue the target companies. In 2015, the investment firm got in the way of The Walt Disney Company's attempt to buyout its French subsidiary Euro Disney. CIAM started a legal battle against the merger, and an appeal on the case is still pending at the French Court of Cassation. A criminal proceeding on the issue is also still ongoing. "We are working a lot behind the scenes on this issue," D'Andlau told Activist Insight on Wednesday. In 2013, CIAM also waged a campaign against Chinese conglomerate Fosun International's attempted takeover of vacation villages operator Club Méditerranée, managing to have the deal frozen by regulators. Eventually, Italian investor Andrea Bonomi made a competing offer, triggering a two-year-long bidding war for the French company - which was won by Fosun. CIAM also teamed up with other funds to push Vivendi to increase a bid to acquire full control of Canal+. "Over the last three years, we pursued around seven-eight activist campaigns, and only 30-50% of our portfolio has been dedicated to activist positions," D'Andlau told Activist Insight, adding that when they are not involved in merger arbitrage campaigns, they prefer to work behind the scenes.

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