Ricky Sandler notched a partial victory in his latest activist campaign.
The founder of Eminence Capital was nominated to the board of directors of specialty chemicals maker Ashland Global Holdings, according to regulatory filings.
Eminence currently owns 9.3 percent of the shares, making it Eminence’s third-largest long position. It is also Ashland’s second-largest shareholder.
“Mr. Sandler expressed his interest in being considered for possible nomination to Ashland’s Board,” Ashland stated in its proxy, noting that if Sandler is approved, the board’s size will increase to 11 directors.
The development comes as Eminence is poised to post its best results in many years. Through November, Eminence Partners, the firm’s long-short fund, is up in the mid-20 percent range, while Eminence Partners Leveraged is up in the high 30 percent range, according to a individual who is familiar with the results.
Eminence disclosed its stake in Ashland back in June, stressing at the time that it bought the shares for investment purposes but that it intended to discuss with the board of directors and management “a variety of operational and strategic opportunities to enhance shareholder value.” It then used standard boilerplate language to suggest it may take some undefined future action.
Eminence started buying the stock on May 6 and paid between roughly $72 and $80 for the shares, according to the earlier filing. Shares of Ashland are now trading in the mid-$70s.
On May 7 Ashland announced it entered into an accelerated share repurchase agreement with Goldman Sachs to buy back $200 million of common stock from the investment bank.
In recent months Ashland has also announced changes to its senior management ranks. In October the board of directors elected Guillermo Novo as chairman and CEO, effective December 31. He replaces William Wulfsohn.
Meanwhile, in early September Ashland announced it completed the previously announced sale of its composites business and butanediol manufacturing facility in Marl, Germany to INEOS Enterprises in a transaction valued at about $1.1 billion. These deals were initially agreed upon before Eminence had invested in Ashland.
Meanwhile, Eminence continues to enjoy its best year since 2014. Institutional Investor earlier reported in June that Eminence launched a new hedge fund, Eminence Partners Neutral, which was initially funded with internal capital only.
II earlier reported that Eminence began the third quarter running a gross exposure of 234 percent, which is above its historical average and up from 203 percent in the second quarter, according to its second-quarter letter, obtained earlier by II. Net exposure averaged 41 percent in the second quarter and increased to 47 percent by July.
Eminence’s two largest longs through the end of the second quarter were plastic packaging manufacturer Berry Global Group and fashion company Capri Holdings, according to a 13F filing. The hedge fund boosted its stake in Capri by 50 percent in the third quarter, according to the filing. Shares of both Berry and Capri are each down slightly for the year. Eminence initiated its position in Capri in the first quarter of this year.
Eminence’s Ashland investment is roughly breakeven. Eminence’s performance, rather, is being driven by its smaller positions.
For example, shares of Liberty Media Formula One Series C— its fourth-largest long — surged about 47 percent in the first 11 months of the year. The company promotes the famous car racing series. And financial services giant Charles Schwab is up more than 19 percent for the year.
Eminence is also being heavily driven by several of the most popular hedge fund stocks. Alibaba Group Holding — the sixth-largest long — and Alphabet, the seventh largest, are up 46 percent and 28 percent, respectively, for the year through November.
