Mario Gabelli (Trades, Portfolio) purchased a new 4.9% stake in HC2 Holdings Inc. (OTCPK:HCHC), a Virginia-headquartered holding company undergoing transformation. The transaction consisted of 685,978 shares of the company, which had a closing price that day of $3.99 per share, far from its 52-week high of $12.71 reached in August 2013.
Until April 9, HC2 operated as PTGi Holding Inc., a wholesale service provider to fixed and mobile network operators globally. On May 13, the company announced it would sell its North American retail telecommunications operations in the U.S. and Canada to York Capital Management for $129 million, while continuing to manage its traditional telecom services with a focus on hosted phone, Ethernet, local and high-speed Internet. The board used proceeds from the sale to pay shareholders a special $8.50 per-share dividend, distributed Aug. 28, the date the stock price dropped dramatically.
HC2’s stock price history:
On May 13, HC2 also announced it entered an agreement with SAS Centure LLC to acquire its 2.5 million common shares of Schuff International Inc. for a 60% stake in the company, which is the largest steel fabrication and erection company in the U.S. HC2 plans to continue the company’s work of building complex steel projects and paid $79 million for the stake.
By May 30, HC2 negotiated to acquire an additional 200,000 Schuff International shares, bringing its total interest to 65% of the company. HC2 also appointed a new president and CEO of Schuff, Rustin Roach, a 15-year Schuff veteran, effective June 4.
HC2 ended its second quarter with $13 million in cash on its balance sheet, increased from $8.997 million at 2013 year-end. Its liabilities totaled $28.4 million, down from $33.3 million at year-end.
For more stock picks of Mario Gabelli (Trades, Portfolio), visit his portfolio here. For more stock picks of gurus, visit GuruFocus’ Real-Time Picks. Not a Premium Member of GuruFocus? Try it free for 7 days here!