Lowe's shareholder Pershing Square files with FTC, clearing way for potential activism
14 JUN 2018
Pershing Square, the investment firm run by Bill Ackman, has received early termination approval from the US Federal Trade Commission for an unspecified transaction in Lowe's Companies [NYSE:LOW], the North Carolina-based home improvement retailer.
The FTC notice, which was made public late Wednesday (13 June), named PS Holdings Independent Trust, a Pershing Square-related entity.
Several newswires reported on 23 May that Pershing Square had bought a stake in Lowe's worth about USD 1bn. The Wall Street Journal reported at the time that the investment was expected to be an amicable one and that Ackman supported Marvin Ellison, appointed on 22 May as Lowe's new chief executive officer effective 2 July.
Since those reports in May, Ackman does not appear to have taken any actions typically associated with activist investors.
A passive investor that acquires more than USD 84.4m worth of stock and, using the passive investor exemption, does not make an HSR filing, may subsequently decide to play a more active role. But the investor cannot buy any more shares without first making an HSR filing.
PS Holdings Independent Trust, the entity listed on Wednesday's FTC notice, also appeared on an FTC notice dated 30 March 2018 in regards to United Technologies [NYSE:UTX]. Pershing Square's stake in UTX had previously been reported in February, when The Wall Street Journal said Ackman viewed UTX as a good company and had not decided if he would be an activist in it. In May, less than two months after receiving FTC clearance, Ackman reportedly called for a breakup of the company.
David Batchelder, co-founder of Relational Investors, became a Lowe's board member in March under an agreement with D.E. Shaw.