ValueAct Capital's Jeffrey Ubben will bring his hybrid background of
value investing, activism and private equity to the board of Sara Lee
Corp. -- but don't expect ValueAct to launch a proxy contest or offer
to buy any assets of the Downers Grove, Ill.-based foods and household
products company.
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Sara Lee agreed to expand its board from 10 to 11 seats and add
Ubben as a director, according to a Securities and Exchange Commission
regulatory filing on Aug. 25. But, according to the agreement, Ubben
and ValueAct will leave much of their activist and private equity
efforts at the door. As part of the deal, ValueAct agreed to have Ubben
step down from his board position if the hybrid activist buyout shop
fund cuts its stake to less than 4.5%.
The
agreement also locks ValueAct, for now, from engaging in any buyout or
activist strategies. In addition to agreeing not to buy any Sara Lee
assets, ValueAct promises not to launch a proxy contest, form a group
to press for changes or enter into any hedging transactions.
More specifically, ValueAct agreed not to:
(i) acquire any [Sara Lee] securities, property, asset or business,
(ii)
effect or propose any tender or exchange offer, merger or other
extraordinary transaction involving [Sara Lee] or tender any voting
securities of [Sara Lee] into any such tender or exchange offer or vote
any voting securities in favor of any such extraordinary transaction,
(iii) form, join, encourage, influence, advise or participate in a "group" within the meaning of the SEC's Section 13D,
(iv)
make, or in any way participate in any solicitation of proxies to vote
any [Sara Lee] securities (other than for a proposal supported by the
board),
(v) make or be the proponent of any stockholder proposal,
(vi)
call or seek to call a meeting of stockholders, seek representation on
the board or seek the removal of any member of the board,
(vii)
propose or take action in support of, or make any proposal that
constitutes, advising, controlling, influencing or changing the board
or management,
(viii) sell, transfer
or otherwise dispose of any [Sara Lee] voting securities to any person
who is a beneficial owner of five percent (5%) or more of the
outstanding voting securities of the company,
(ix) enter into hedging or similar transactions with respect to [Sara Lee]'s stock.
Ubben
got his start running a "deep value" fund between 1987 and 1995 for
mutual fund manager Fidelity Investments. Ubben left Fidelity to become
a managing partner at Blum Capital Partners, where he took his value
investing base of knowledge and applied it to a part activist-, part private equity-style of investing. Now value investing, activist
investing and private equity investing all round out Ubben's experience
at ValueAct - Ron Orol
Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.
