ValueAct acquires $1.9-bn stake in Microsoft
23 Apr 2013
Microsoft Corp, the largest software maker in the world was up the most in a year after activist investor and hedge fund ValueAct Holdings acquisition of a $1.9-billion stake in it.
The shares rose 3.6 per cent to $30.83 at the close in New York, the biggest gain since 20 April, 2012, and the highest closing price since 21 September.
The shares were up 15 per cent this year, as against with a 9.6 per cent gain for the Standard & Poor's 500 Index.
Meanwhile, Microsoft chief executive officer Steve Ballmer was working to deliver more software and services over the internet to increase sales amid a global PC slump that was eroding demand for pre-installed programmes.
ValueAct, with a history of investing in companies it believed to be fundamentally undervalued, said that Microsoft could succeed in this effort, aided by the Azure cloud-computing platform.
''In three to five years, which is our time horizon, we'll stop talking about PC cycles and instead talk about Microsoft as the largest cloud-computing company in the world,'' ValueAct CEO Jeffrey Ubben said today at a conference in New York.
Reuters quoted Ubben as saying ValueAct would not do any campaigning to change Microsoft's strategy.
In an e-mailed statement, Microsoft said its board and executives ''welcome the perspectives of shareholders.'' The Redmond, Washington-based company also added it was committed to ''enhancing value for all shareholders.''
ValueAct described itself as a fund that combined intensive due diligence, a concentrated number of investments, and active, constructive involvement in the value creation at those investments.
With $10 billion in assets under management, it was focused on acquisition of significant ownership stakes in a limited number of companies that it believed were fundamentally undervalued.
ValueAct Capital typically makes three to four new investments in a year with an average holding period of three years and is holding about 20 different equity nvestments in its portfolio. The investment size usually varies between $50 and $500 million.
