Event-Driven Jana Partners Sells More Falcon Minerals

Value investors reduce position after merger

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Sep 28, 2018
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Jana Partners (Trades, Portfolio), a value-oriented, event-driven investment adviser, reported this week that it continued reducing its stake in Falcon Minerals (FLMN, Financial).

The firm sold 944,703 shares of Falcon Minerals, trimming the stake by 29.87% to 2,218,140 shares. The sale shrinks its ownership of the company to 2.58% from 3.68%. Jana Partners (Trades, Portfolio) sold the shares on Sept. 20 at a price of $11.46, Sept. 21 at a price of $11.32 and Sept. 24 at a price of $11.38.

Falcon Minerals was formed in August when Osprey Energy Acquisition Corp. acquired Royal Resources LP and changed its name to Falcon Minerals. It started trading on the Nasdaq on Aug. 24. Jana Partners (Trades, Portfolio) had purchased 2.5 million shares of Osprey in the third quarter of 2017 at an average price around $10, boosting the position to 6,487,787, or about 13.4% of the company after it changed to Falcon Minerals, on Aug. 31 at the price of $11.39. The stake included 2,521,551 shares upon the conversion of warrants. Jana has been selling the shares periodically throughout the month of September.

Shares of Falcon Minerals traded down 0.09% Friday afternoon around $11.10.

Falcon Minerals is a $952.13 million market cap company formed to purchase high-growth mineral assets likely to generate free cash flow. It has mineral and royalty interested in 251,000 gross unit acres in the Eagle Ford and Austin Chalk in Texas.

Falcon is part of Jana Partners (Trades, Portfolio)’ $3.5 billion portfolio that lists 49 stocks. The holding represented only 0.72% of its positions.

Moreover, the basic materials sector occupies only 0.62% of the portfolio has one of its small sectors. Aside from Falcon Minerals, it owns only RPM International Inc. (RPM, Financial) in the space.

As its largest holdings, Jana had its largest holdings as of second quarter-end Pinnacle Foods Inc. (PF, Financial) at 19.01% of the portfolio, Zimmer Biomet Holdings Inc. (ZBH) at 9.08% and HD Supply Holdings Inc. (HDS, Financial) at 8.44%.