ADT Corp ADT.N, the home security company recently spun off from Tyco International Ltd (TYC.N), said on Thursday that it had held constructive discussion with Corvex Management LP, an investment firm that has taken a 5.02 percent stake.
Founded by Keith Meister, one of activist investor Carl Icahn's longtime associates, Corvex said in a filing with the U.S. Securities and Exchange Commission that it believed ADT shares were undervalued and had met with management to discuss strategy. It may buy additional shares.
The purchases began on September 17, when ADT began trading on a when-issued basis, and continued once the stock began trading on the open market on October 1.
George Soros' Soros Fund Management owns a 0.25 percent stake in ADT, the filing showed.
Corvex said it wanted ADT to consider "strategic alternatives including ... improving capital structure and capital allocation," according to the regulatory filing.
Neither ADT nor Corvex had any additional comment.
ADT shares were up 7 percent at $40.99 in morning trading. Earlier in the day, they had risen as much as 11 percent to $42.42, the highest level in the stock's six-week existence.
ADT is the largest home monitoring company in the United States and Canada, with a market capitalization of about $8.8 billion. Until recently it was a part of Tyco, which also spun off its flow control business, which merged with Pentair.
(Reporting by Nick Zieminski and Martinne Geller in New York; Editing by Dale Hudson and Lisa Von Ahn)