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Carl Icahn Continues to Ride Organic Food Boom

February 28, 2011 | About:
matsandalex

matsandalex

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Carl Icahn continues to load up on shares of organic food distributor The Hain Celestial Group, Inc.(HAIN).

In a Feb. 18, 2011 SEC filing Icahn revealed that he picked up another 15,800 shares since December 31, 2010.

HAIN is top eight holding for Icahn and comprises 2.57% of his portfolio. However, more importantly Icahn owns a large stake in HAIN and the activist investor has significant influence on the Board. He owns over 16% of the company and he controls two board seats.

Icahn started accumulating shares in the second quarter of 2010 at $22.61 but he has continued to be bullish as the price has risen to over $29.

Most likely Icahn is looking to pressure the Board into selling the company to a larger food distributor. In years past, HAIN has been rumored to be a takeover target of HJ Heinz.

However, the NY Post recently reported that Carl Icahn may find it difficult to find a buyer for Hain Celestial Group because the company is expensive. "I know there is not a lot of interest from [peers] to buy the whole company," said one source, adding that Hain is trading at too high a multiple to attract private-equity firms.

Icahn's other option is to sell off divisions of the company in order to create some shareholder value.

HAIN manufactures, markets, distributes, and sells natural and organic food, and personal care products in the United States and internationally.

The company has been a prime beneficiary of the massive trend in organic food products with sales growth of over 10% per year over the last decade.

Read more hedge fund news at http://fundmanagernews.com/

Rating: 3.6/5 (12 votes)

Comments

kfh227
Kfh227 premium member - 3 years ago
Is the whole reason Icahn is buying simply to try to sell it for more than he paid for it? Looking at het numbers, I don't see the value.

Is this his true motivation? Or is there something more?

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