(Adds details, share movement, analyst comment)
By Bijoy Anandoth Koyitty
Feb 8 Marcato Capital Management reported a 5.2
percent stake in auto parts maker Lear Corp and the
hedge fund said it planned to nominate candidates to the board,
sending its shares higher in early trading.
Shares of Lear, which in 2007 rejected a $3 billion buyout
attempt by an affiliate of billionaire investor Carl Icahn, rose
as much as 8 percent on the New York Stock Exchange on Friday
Marcato - run by Mick McGuire, one of activist investor
William Ackman's former partners - becomes the third-largest
shareholder in the company with the investment, behind BlackRock
Inc and Robeco Investment Management.
BlackRock holds 7.45 percent of Lear and Robeco Investment
Management 5.3 percent, according a regulatory filing.
Marcato said it recently discussed Lear's capital allocation
practices and actions, including share repurchases, with the
company's senior management.
Lear said on Thursday it would accelerate its previously
authorized share repurchases and increase its dividend.
"We believe that the market has perceived management to have
been lethargic in its actual repurchase of shares," Guggenheim
Securities analyst Matthew Stover wrote in a note to clients.
Marcato, whose top holdings include Trinity Place Holdings
, GenCorp Inc, Cincinnati Bell Inc and
DineEquity Inc, said it would still engage in
discussions with the management regarding the nomination of
The fund said that the 5.2 percent stake translates to
5,034,986 shares, which includes options to purchase shares that
are exercisable within the next 60 days.
Last week Lear, which has a market value of about $4.92
billion, reported a fourth-quarter profit that beat analysts'
The company's shares, which have gained 19 percent in value
in the last three months, were up 4 percent at $52.92 on the New
York Stock Exchange on Friday morning.
(Reporting by Bijoy Koyitty in Bangalore; Editing by Sreejiraj
Eluvangal, Supriya Kurane)