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Now the hedge fund manager who calls himself a friendly activist is waiting for Nabors Industries to make its next move.
Blue Harbour Group CEO Cliff Robbins
Cliff Robbins, the CEO of Blue Harbour Group in Greenwich, Connecticut, had a quiet victory this week. Robbins is an activist investor, but he calls himself a friendly activist, and one of his target companies, Nabors Industries, came out with a shareholder-friendly plan to reform its corporate governance structure. The California Tea State Teachers' Retirement System was the main force behind the governance changes, but Robbins, whose hedge fund is the lead stockholder in Nabors, saw the move as part of a larger overhaul that he is spearheading.
Robbins doesn't conduct his campaigns with fights or proxy contests. Instead he seeks out undervalued companies, mostly in the small to mid-cap range, where he likes the management and directors and finds them receptive to his ideas about how to make improvements that are likely to boost the stock price. He invests only when he's sure the company's executives will work collaboratively with him. Nabors, an oil and gas drilling technology and equipment company based in Hamilton, Bermuda, with a market cap of $7.14 billion, was a typical venture for Robbins.
He started looking at Nabors early last year, when the stock was trading at around $15. "We believed the stock was trading at big discount to its intrinsic value," says Robbins. He spent many hours in meetings with chairman and CEO Anthony Patrello. Robbins recommended selling off non-core assets that the market didn't...