These Are The Top 50 Hedge Fund Long And Short Positions | Zero Hedge




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These Are The Top 50 Hedge Fund Long And Short Positions

2018 was the year hedge funds were supposed to finally outperform the S&P. Alas, as the latest Goldman Sachs hedge fund trend monitor - a survey of 848 hedge funds with $2.3 trillion of gross equity positions ($1.6 trillion long and $702 billion short) as of March 31, 2018 - that was not meant to be, and while the hedge fund hotel basket of most popular stock is just marginally outperforming the S&P YTD, both the equity hedge fund index, the composite hedge fund index, and the global macro hedge fund index are all trailing the S&P500. Again.

Yet amid this chronic underperformance, we should note that less than three weeks after we reported that the Goldman Hedge Fund VIP basket was getting slammed in late April, mostly as a result of a hit to the tech sector and FAANGs, it has since recently recovered, largely thanks to the previously discussed wholesale short squeeze, mostly among tech, healthcare and energy names.

Also of note: strong fundamental results did not result in strong performance: the average outperformance of stocks beating earnings estimates was less than half the typical amount. As a result, funds apparently trimmed their top positions. And so, in late April, Goldman's VIP basket of the most popular hedge fund long positions (ticker: GSTHHVIP) underperformed a basket of stocks with the highest short interest (GSTHVISP) by nearly 400 bp, lagging for six days in a row. In the last few weeks, as noted above, these favorite positions have recovered.

As discussed previously, during these sharp rotations in the past month, a major short squeeze was taking place, however that failed to dent the conviction of the smart money, and "hedge fund crowding" in the most popular positions rose slightly in 1Q and remains elevated relative to history. As a result, as shown in the chart below, the average hedge fund holds 68% of its long portfolio in its top 10 positions, the highest level in two years and slightly below the record “density” of 69% in 1H 2016.

Similarly, the share of S&P 500 market cap accounted for by the 10 largest index constituents has risen in recent years and now sits at 22%, modestly above the historical average but the highest share this cycle.

That about covers the macro picture.

What about at the micro, single-stock level? Here, too, there were some notable shifts.

First, as Goldman points out, during 1Q, Facebook was the stock with the largest increase in popularity, with hedge funds viewing the stock’s volatility as a buying opportunity. As a result, 53 funds built a new position and 60 funds added to existing positions in FB, while 53 funds trimmed or dropped the stock completely during the quarter. Furthermore, at the start of 2018, Facebook ranked as #2 in Goldman VIP basket of most popular hedge fund positions.

The list below shows the names with the largest net increase in fund popularity.

And while the #1 stock was Amazon, it also experienced the largest drop in popularity among all stocks during 1Q.

This quarter, Facebook and Amazon again appear as the top two VIP stocks, but with their relative positions flipped. AAPL, GOOGL, and NFLX also appeared among the stocks with the largest declines in popularity, even though tech stocks remain the sole "leaders" of the broader market.

Which brings us to the 50 stocks that matter the most to hedge funds, i.e. the Goldman Hedge Fund VIP list, also known as the "Hedge Fund Hotel California."

Finally, for those who are convinced that it's only a matter of time before a massive squeeze sends the most shorted names soaring, here is the list of the 50 stocks representing the largest short positions among hedge funds.

WSJ : Behind a Hedge Fund’s Billion-Dollar Bet On Busted Oil Companies

Behind a Hedge Fund’s Billion-Dollar Bet On Busted Oil Companies
Fir Tree is ahead on its overall wager, but lack of investor appetite for weaker players complicates its ability to cash out of some investments

With oil prices at their highest level in three years, it would seem a good time to cash out of energy investments purchased cheaply during the oil rout.

Hedge-fund manager Fir Tree is finding it isn’t.

Fir Tree was one of several Wall Street firms that saw an opportunity to profit from the pain inflicted on heavily indebted energy producers when oil prices plunged in late 2014 from more than $100 a barrel to as little as $26.

The gambit involved buying up the debt of struggling producers for pennies on the dollar from investors hitting the exits, swapping the bonds and loans for stock in restructured companies and then waiting for an upswing in oil prices to lift the shares.

But Fir Tree and others who pursued this trade misjudged investors’ appetite for many of the stocks. While U.S. oil prices have climbed to more than $70 a barrel, the rise has failed to draw investors to the industry’s weaker players.

Some of these companies are having a hard time being profitable due to drilling fields that are less prolific than those of rivals. Others wiped out shareholders when they filed for bankruptcy protection and have had trouble convincing prospective investors it won’t happen again.

Investors are also wary of natural-gas prices that remain unprofitably low for many drillers and the potential for oil prices to tank again if the Organization of the Petroleum Exporting Countries ends its 2016 pact to limit output.

“This is ground zero for the worst area in the market,” said Clinton Biondo, one of Fir Tree’s managing partners. “As these companies have emerged, the public markets’ response has been really unbelievable to us. It’s historic how poorly they’ve performed.”

Though oil is up 20% since mid 2015 and the S&P 500 stock index has gained nearly a third, energy stocks, particularly those of smaller companies, have lagged behind. Energy shares in the S&P 600 index of smaller companies have lost 31%.

“Not too many investors want to sell Amazon to buy an oil-and-gas company,” said Michael Scialla, an energy analyst at Stifel Financial Corp.

Fir Tree bought distressed energy-company debt with face value of more than $3 billion. Because it paid so little, Fir Tree remains ahead on its overall energy wager, which at times has been as big as $1.6 billion, according to people familiar with the matter. But swooning shares have gnawed away at its gains and complicated its ability to cash out.


The firm has big stakes in six oil-and-gas explorers whose shares have lost at least 20% over the past year. Shares of Ultra Petroleum Corp. , representing one of the firm’s largest energy bets, are down 84% since the company emerged from bankruptcy protection about a year ago.

“It stands to reason these are not bad investments,” said Brian Williams, a partner at investment-banking and restructuring advisory Carl Marks Advisors. “They’re just getting hung up in them longer than they’d want.”

In a letter sent to investors last autumn, Fir Tree described how its investment in Ultra remained “highly profitable” despite shares that by then had lost nearly half their value. The firm said it paid less than 10 cents on the dollar for Ultra bonds valued at $440 million, which gave it a prominent place at the negotiating table during the Wyoming-focused driller’s reorganization. When Ultra came out from bankruptcy protection, Fir Tree was its top shareholder.

Fir Tree, which managed $8 billion at year end, specializes in wringing profits from distress. As a holder of Puerto Rico’s defaulted bonds, a creditor in the yearslong bankruptcy of Lehman Brothers Holdings Inc. and negotiating settlements with banks over bad mortgage bonds, the firm’s strategy often involves as much legal maneuvering as trading.

In the oil patch it has taken activist-shareholder stances at SandRidge Energy Inc. and Jones Energy Inc., where it has disclosed 5.6% and 6.7% stakes, respectively. It appointed one of its partners, a former bankruptcy attorney named Evan Lederman, to be chairman at Ultra and pushed the company to replace its longtime CEO and hedge more of its output to lock in prices.

Mr. Biondo said Fir Tree has focused on instilling fiscal discipline among drillers accustomed to spending more than they made chasing $100 barrels. “Guys were just lighting cash on fire, growing at any cost,” he said.

Mr. Lederman also became chairman at Linn Energy Inc., a Houston company in which Fir Tree holds a 19.2% stake. After emerging from bankruptcy protection, Linn sold $1.9 billion of assets to repay debt and buy back shares; said its longtime CEO would retire; laid out plans to ditch a corporate structure in which profits are paid out to shareholders to avoid taxes, and said it would split into two companies. Its shares are up 51%.


A smaller bet with an even sharper rise has involved Legacy Reserves LP. Its stock has quintupled since Fir Tree acquired about 5% in a deal to sell the company back some of its debt.

Yet Fir Tree’s bet on busted oil companies will ultimately depend on some of the worst-performing stocks in America reversing course.

“While there is still some work to do, these companies are as healthy as they’ve ever been,” Mr. Biondo said. “The market will take notice over time.”

>>> What to look at this Week-End - 19th & 20th of May 2018

Equity markets leaned into several stiff headwinds this week, but ultimately held up relatively well. Indices experienced some turbulence on Tuesday when US Treasury yields finally broke out to fresh multi-year highs highlighted by the benchmark 10-year surpassing the 2014 high of 3.03%. Tuesday also saw the May Empire manufacturing data jump and solid April retail sales figures solidify expectations that the Fed remains on a gradual path to normalization despite another soft first quarter. Subsequently, the greenback saw upside momentum accelerate, which continued to result in pain for a host emerging market currencies and relative weakness in their regional stock markets. European Union jitters re-emerged with the formation of a more populist government in Italy, which once again manifest in the widening of peripheral bond spreads, hearkening back to the Greek crisis earlier this decade. The trade news out of Washington DC wasn’t particularly positive, either: House Speaker Ryan’s imposed NAFTA deadline came and went without any concrete agreements to speak of, while President Trump himself noted he was doubtful China trade talks would be successful just hours before meeting Vice Premier Liu He at the White House. Nevertheless, the Russell 2000 was the first of the US indices to retake fresh all-time higher territory, and for the week the Dow fell 0.5%, S&P lost 0.5%, and the Nasdaq dropped 0.7%.

In corporate news, optical names rallied early in the week on a potential about-face by President Trump to perhaps loosen US sanctions against China’s ZTE. CBS sought to prevent Shari Redstone’s National Amusements from blocking a shareholder vote to dilute her voting power in the company, but a judge denied CBS’s motion for a temporary restraining order, sending CBS shares sharply lower Thurs. Home Depot earnings surprised to the upside, but revenue was weaker than expected, hampered by a long winter. Macy's jumped on an earnings beat and raised guidance, while Nordstrom fell on disappointing outlook. Deere beat and raised its net income outlook amid strengthening demand. Abaxis surged on a $2B Zoetis offer to buy the veterinary point of care instrument manufacturer for $83/shr. Kroger shares popped after inking a partnership deal with the UK’s Ocado Group. - Source TradeTheNews.com



Macro :
- It Was an Unlucky Week to Throw $8.8 Billion at the Stock Market
- U.K. to Propose Reform on Social Media Giants in Autumn: S.Times
- China agrees to purchase more US goods in effort to avoid trade war, but refuses to commit to US demand to narrow trade gap by $200B

Keep an eye on :
- ABE SM : ACS, Atlantia Increase Stake in Abertis to 90%, Expansion Says
- AF FP : France Won’t Sell Air France Stake For Now, Le Maire Says
- BT/A LN : BT Considers GBP1.5B Mast Sale to Fund Broadband: Telegraph
- DBK GY : Deutsche Bank CFO Sees Slowdown in Restructuring Costs: BZ
- DB1 GY : Deutsche Boerse Decides Rule Changes for MDAX, SDAX, TECDAX
- EDF FP : *EDF IS SAID IN TALKS TO SELL HALF OF ITS UK WIND ASSETS: FT
- EDP PL : Portugal Was Contacted by Major Shareholders in EDP: Expresso
- EDP PL : EDP Says Capital Group Companies Cuts Shareholding to 9.97%
- ENGI FP : Engie Board Approves Ex-Solvay Chief Clamadieu as Chairman
- ENPL LI : Deripaska Departs En+ Group; Tronox Outperforms: Materials Wrap
- FCA IM : FCA U.S. to Recall About 48,990 2018 Jeep Cherokee SUVs
- GE US : GE Said Near Deal to Merge Transportation Unit With Wabtec: Rtrs
- HMB SS : Swedish Royal Family Fund Sold H&M Stake in 1Q: SR
- IAG LN : IAG to Lease Gatwick Slots to Qatar Airways, Thomas Cook: FT
- LI01 GY : Sygnis Raises FY Rev Guidance After Purchase TGR Biosciences
- MAR PL : Martifer Names Pedro Duarte as Chief Executive Officer
- MITRA BB : Mithra CEO Isn’t Against Selling Belgian Drugmaker, L’Echo Says
- OERL SW : Vekselberg Cuts Stakes in Oerlikon, Schmolz + Bickenbach: Rtrs
- PAH3 GY : Porsche N. America to Recall 305 Vehicles of 918 Spyder: NHTSA
- SAN FP : Sanofi CFO Contamine to Become Ablynx Chairman When Deal Closes
- SBRY LN : Sainsbury takeover of Asda could face parliamentary inquiry amid concerns for UK farmers - thisismoney.co.uk
- STLN SW : Vekselberg Cuts Stakes in Oerlikon, Schmolz + Bickenbach: Rtrs
- TEF SM : Telefonica Says O2 Unit an Asset, Not For Sale: Economista
- UL NA : Unibail Weighs Rebranding Some Malls as Westfield After Deal

FT : UK has not renewed Roman Abramovich’s visa

UK has not renewed Roman Abramovich’s visa
Oligarch and owner of Chelsea football club returns to Russia

  • Roman Abramovich misses FA Cup final after visa expired
  • Home Office does not comment on why investor visa has not been issued
  • Linked to residence applications in Jersey and Switzerland

The UK has yet to renew a visa for Roman Abramovich, the Russian oligarch and owner of Chelsea football club, after it expired last month, according to four people close to the billionaire.

London-based Mr Abramovich, who is Britain’s 13th richest man according to the Sunday Times with £9.3bn, left the UK after his investor visa expired and did not attend Chelsea’s 1-0 win in the FA Cup final on Saturday. According to two people close to him he has returned to Russia.

He also did not testify as expected last week in a London court dispute between two other Russian oligarchs, Oleg Deripaska and Vladimir Potanin.

Pressure is growing to take action against Russian oligarchs in London after the poisoning in March of ex-Russian military intelligence officer Sergei Skripal and his daughter Yulia with a rare nerve agent in Salisbury. At the time, foreign secretary Boris Johnson promised that the UK would “go after the money” in retaliation of the attack.

David Davidovich, an associate of Mr Abramovich’s holding company Millhouse, told the court that Mr Abramovich was in Switzerland preparing to appear as a defendant in a separate case.

“There’s something up with his visa. I don’t know what it is and they don’t know what it is either. Let’s hope they sort it out soon,” a fellow Russian oligarch said.

One person close to Mr Abramovich said that the request for a visa had not been denied, but that the UK authorities were taking longer than usual to renew it without offering any explanation. A spokesman for Mr Abramovich declined to comment.

The Home Office declined to comment. “We do not routinely comment on individual cases,” said security minister Ben Wallace.

Bob Seely, a Conservative MP, said: “Either there is an innocent explanation [for the delay in Mr Abramovich’s visa], or the government is becoming less sympathetic to Russian oligarchs in the UK. Either way, denying visas to oligarchs is potentially important.”

The news of Mr Abramovich’s visa limbo was first reported by independent Russian news site The Bell.

Funding for new Chelsea stadium unclear
“These things happen for mysterious reasons. It must be very frustrating for him not to be able to visit his beloved Chelsea,” said William Browder, a fund manager who campaigns for sanctions against the flow of Russian money into western capitals.

Chelsea, which Mr Abramovich bought in 2003, did not immediately respond to request for comment.

The billionaire is known to take a close interest in club affairs, though its day-to-day management is under the control of Chelsea director Marina Granovskaia and chairman Bruce Buck.

Chelsea has obtained planning permission to build a new £500m stadium at Stamford Bridge, preparing to break ground on the project in the coming years. It remains unclear how the stadium project will be funded. People close to the plans have said Mr Abramovich, possibly alongside other investors, could cover the cost without the need to tap the club’s finances.

The Premier League was not aware of the delay to Mr Abramovich’s visa. As a club owner, Mr Abramovich will undergo the League’s yearly fit-and-proper person test before the start of the season in August, although visa status is not a criterion in itself.

Jersey offered residence to Abramovich
Mr Abramovich grew his fortune in Russia’s turbulent 1990s by acquiring privatised oil and gas assets from the state, then selling them back to Kremlin at a large profit. He has spent much of his time in London since buying Chelsea, where he owns an estate on the so-called Billionaire’s Row in Kensington Palace Gardens.

The US named Mr Abramovich on a public “Kremlin Report” of oligarchs in January.

That month, the authorities in Jersey made Mr Abramovich an offer of residency, which would see him pay no capital gains tax or inheritance tax and a one per cent income tax rate following an initial payment of £145,000 a year. Mr Abramovich has not taken up the offer, according to a person close to him.

In February, Swiss newspapers reported that Mr Abramovich had twice applied for a residency permit there in 2016 and 2017. Mr Abramovich sued to have the information deleted, but Switzerland’s highest court ruled in favour of the newspapers, Le Matin Dimanche and Sonntags Zeitung. Mr Abramovich withdrew his application, according to a person close to him.

Home secretary Amber Rudd said in March that Britain would review Tier 1 visas given between 2008 and 2015 to businessmen prepared to invest at least £1m, including about 700 Russians. The qualifying amount has now been raised to £2m.

On its website the Home Office tells applicants: “You should get a decision on your visa within 3 weeks.”

According to Transparency International, almost a quarter of all such visas handed out by the UK government between 2008 and 2015 went to Russians, accounting for a minimum of £729m in investment.

Russian president Vladimir Putin has repeatedly encouraged oligarchs to “de-offshorise” their wealth, but with little success. Despite high demand for a $3bn Russian eurobond late last year, only $200m was bought by oligarchs under special amnesty terms.

FT : France’s finance minister fires EU budget warning to Italy

France’s finance minister fires EU budget warning to Italy
Bruno Le Maire says Rome needs to respect rules or risk jeopardising single currencycould

The French finance minister issued a blunt warning to Italy’s budding populist government on Sunday, saying that Rome needed to respect EU budget rules or the single currency would be in jeopardy.

The warning from Bruno Le Maire was immediately rebuffed by Matteo Salvini, the leader of the far-right League, which is poised to launch a Eurosceptic government in Rome alongside the anti-establishment Five Star Movement. 

“This is another unacceptable pitch invasion,” he wrote on Twitter. “I didn’t ask for votes . . . to continue on a path of poverty, precariousness and immigration: Italians first!”. 

After finalising an agreement on a common platform of fiscal expansion, a crackdown on immigration, and a shift towards Russia on foreign policy at the end of last week, Mr Salvini and Luigi Di Maio, the Five Star leader, met in Rome on Sunday to agree on a choice for prime minister, which they are due to present to Sergio Mattarella, Italy’s president, on Monday, for his approval. 

“We hope no one will place vetoes on this person’s name or surname. We won’t accept it,” Mr Salvini said. “It won’t be me, nor Di Maio. It will be a balanced name that satisfies us both,” he said. 

The intervention by Mr Le Maire reflects growing angst in eurozone capitals that the new Italian government could destabilise the single currency by implementing large tax cuts and spending increases that would sharply increase Italy’s budget deficits.

Italy has one of the highest debt ratios in the eurozone, at more than 130 per cent of GDP, which makes it particularly vulnerable to a sovereign crisis. 

“Italians must understand that the future of Italy is in Europe and nowhere else, but there are rules to respect,” Mr Le Maire said in an interview on Europe 1 radio.

“If the new government takes the risk of not meeting its commitments on the debt, the deficit, but also the clean-up of the banks, it is the entire financial stability of the eurozone which would be threatened,” he added.

In their joint platform, Five Star and the League called for a sweeping review of Eurozone economic governance, calling it “asymmetric, and based on the dominance of the market compared to the broader social and economic dimension”. 

A poll released on Sunday showed that most Italians are firmly behind Five Star and the League as they launch their government.

According to Demos, a polling firm, 60 per cent of voters had a “favourable” or “very favourable” opinion of a Five Star-League tie up, more than the combined 50 per cent that voted for the parties in the general election in March. Only 34 per cent of Italians were “opposed” or “very opposed” to the new government. 

On Friday, Five Star asked its members to approve the new coalition through an online vote, receiving resounding support, with 94 per cent agreeing to the deal with the League. At the weekend, the League asked its supporters to back the deal in a vote held at stalls across the country. 

The selection of the prime minister has been the subject of a tug of war between Mr Di Maio and Mr Salvini. Since Five Star clinched the largest vote share in the March election, it is expected to secure the post, but Mr Salvini has resisted allowing letting Mr Di Maio take it.

Huffington Post Italy reported on Sunday that Giuseppe Conte, a professor of public administration at the University of Florence, and Andrea Roventini, a professor of economics at Sant’Anna University in Pisa, were the other leading names under consideration. 

“Only Di Maio and Salvini know the name,” one Five Star official said on Sunday. 

Some analysts have estimated that the fiscal expansion planned by Five Star and the League could be worth more than €100bn, since the tax cuts and spending increases are laid out with only the vaguest plans to cover the costs with budget reductions elsewhere.

On Sunday, Five Star said in a blog post that sum needed to be distributed across the entire five years of the legislature, meaning the cost would amount to about €20bn to €30bn per year “in line with the previous government but with very different effects”.

It added that about €40bn would be taken in as revenue by cutting tax breaks, and about €30bn would be covered through cutting “wasteful spending”.

The rest would be financed by higher deficits, it said, adding that higher growth would help trim the additional cost.

>>> Barrons weekend summary: positive on consumer stocks PEP, KO and

Barrons weekend summary: positive on consumer stocks PEP, KO and PG

* Cover story: Profile of Jack Bogle, founder of the Vanguard Group and inventor of the index fund; Bogle addresses criticisms that indexing has destabilized the market, suggests how the ETF might come to an end, and says that if the market faces a long bout of underperformance, the necessity of lower costs will increase.

* Features: 1) Profile of Donald Trump’s chief economic advisor, Larry Kudlow, who “may be the last great hope for those still trying to reconcile Trump’s policies with old-school conservative economic principles”; 2) Asset managers, proprietary trading firms, bitcoin miners, and retail investors are growing more comfortable with bitcoin, despite a recent price drop of 58% since December; 3) Positive on PEP, KO, PG: Consumer stocks make sense for income-hungry investors—with the potential for mid-single-digit earnings growth ahead and decent yields, ten percent one-year total returns are within reach.

* Tech Trader: ROKU is shifting from a hardware company to a graphical user interface for TV brands that don’t want to make their own software, becoming a home page for viewers and a portal for 6,000 channels; it shares are a bet on the future of TV.

* Trader: A good part of the recent improvements in the market, such as supercharged earnings growth, may already have been baked into the market high of January 26; Cautious on LOW: Company has trailed rival HD in important metrics such as same-store sales and profit margins, but is taking steps in the right direction, such as the addition of three new board members; Cautious on AVAV, KTOS: Drone makers face a range of challenges, including a whistleblower suit at AeroVironment and cash-flow problems at Kratos, and activist investor Ben Axler has criticized both companies.

* Profile: Andrew Mattock, lead manager of the Matthews China fund, who says China demands that investors be open to new ideas, and be nimble amid constant change in the country (top 10 holdings: BABA, Tencent, Agricultural Bank of China, China Construction Bank, China Life Insurance, Sino Biopharmaceutical, Ping An Insurance Group, China National Building Material, BIDU).

* Follow-Up: A deal between CBS and VIA seems remote, but CBS still holds significant value for shareholders, with NFL games and top-rated prime-time shows both popular by today’s TV standards.

* European Trader: Positive on William Hill, GVC Holdings, 888 Holdings: U.K. companies are a good way for investors to benefit from legalized sports betting, and all likely to see gains ahead.

* Emerging Market: The complicated and uncertain political situation in Malaysia, where events “are weird even by contemporary global standards,” makes investing in the country difficult.

* Commodities: “Prices for diesel fuel may revisit records within the next year or two affecting many markets, from refiners to transportation to agriculture.”

* Streetwise: Donald Trump deserves more credit than he gets for the strength of the U.S. economy, says Brett Arends, despite the erratic nature of his approach to governing.

NY Post : Pinnacle Foods, under pressure from activist, hires investment bank to

Pinnacle Foods, under pressure from activist, hires investment bank to mull options

Barry Rosenstein may be inching closer to bagging another fortune in the supermarket aisle.

Pinnacle Foods — the maker of Hungry Man TV dinners and Vlasic pickles — has hired Evercore Partners to explore strategic alternatives as it faces prodding from Rosenstein’s activist hedge fund Jana Partners, sources told The Post.

Rosenstein’s Jana — which bagged a $300 million profit last year when it successfully pushed Whole Foods into selling itself to Amazon — wants Pinnacle to merge with ConAgra Foods in a deal that would create the second-biggest frozen-foods firm in the US, sources said.

The bank’s hire comes as supermarkets and their suppliers face mounting price competition from Amazon and Walmart, and millennials shun frozen and packaged foods in favor of fresher, healthier eating options.

Separately Friday, Campbell’s Soup said its longtime CEO was abruptly retiring as the company warned on profits.

Jana is a longtime shareholder in ConAgra with a presence on the board of the company, which makes Hunt’s ketchup, Hebrew National hot dogs and Peter Pan peanut butter.

Meanwhile, Jana also emerged in April as the biggest shareholder in Pinnacle, revealing this week it had raised its stake in the company to 9.5 percent.

“This seems like good news,” one deal-hungry source said of Pinnacle’s hire of Evercore.

Nevertheless, Pinnacle, which also owns Birds Eye and Duncan Hines, is studying all its options, according to a source close to the company. Hiring a bank does not necessarily signal a sale, and Evercore is known for advising on defense against activist shareholders and hostile takeovers.

“I think it all comes down to price,” one banker said.

ConAgra CEO Sean Connolly reportedly tried and failed to buy Pinnacle last summer at an undisclosed price. The company, with its $14.7 billion market cap, is about double the size of Pinnacle. A three-year standstill agreement between Jana and ConAgra ended this month, giving Jana the ability to pressure ConAgra to raise its offer.

The hedge fund recently missed a window to launch a proxy fight against Parsippany, NJ-based Pinnacle. But earlier this month, Pinnacle CEO Mark Clouse signaled that he and the fund were on the same page.

“We’ve had historically and continue to expect to have very constructive dialogues with the Jana team,” Clouse said on a May 3 earnings call. “We are open to hearing ideas and are happy to listen to all of our investors, but most certainly Jana as well.”

Combined, the two companies would have a 27-percent market share in the US, and the deal would enable them to lower fixed costs, according to an RBC analyst report.

Instead of selling to ConAgra, sources said Pinnacle could make a move to buy privately held Schwan’s Co., which generates about $2 billion in sales, sources said. Schwan’s, owner of Red Baron Pizza and Mrs. Smith’s pies, in recent weeks hired Piper Jaffray to begin a sale, sources said.

Campbell Soup’s surprise announcement Friday also might indicate that the family trust that controls that business could be open to a merger, a banker said.

Pinnacle did not return calls.

>>> China agrees to purchase more US goods in effort to avoid trade war, but ref

China agrees to purchase more US goods in effort to avoid trade war, but refuses to commit to US demand to narrow trade gap by $200B - press
- China declines to put a dollar amount on the effort to narrow the trade gap
- The White House said “There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China.” China will “significantly increase purchases” of US goods and services to aid America’s economic growth and to meet China's own growing consumption needs.
- US to send a team to China to work out details

>>> J Sainsbury takeover of Asda could face parliamentary inquiry amid concerns

J Sainsbury takeover of Asda could face parliamentary inquiry amid concerns for UK farmers - report
20 MAY 2018
J Sainsbury’s [LON:SBRY] agreed GBP 7.3bn (USD 9.83bn) takeover of UK supermarket rival Asda could face a parliamentary inquiry as well as a previously announced investigation by the UK’s Competition and Markets Authority (CMA), The Mail on Sunday reported.

The newspaper cited one parliamentary source who noted concerns that a new “duopoly” will “crush” farming in the UK, adding that farmers are unable to cut production costs further.

The merged group will be bigger than Tesco, which is currently the biggest supermarket group in the UK.

Members of parliament (MPs) are concerned that CA will not fully consider how the proposed merger will affect small suppliers, the report said.

The chairman of the Commons food and rural affairs committee, Neil Parish, has already held private hearings about the merger and is thinking about beginning a full select committee inquiry, according to the newspaper.

Parish said farmers are “nervous,” adding that he is “suspicious” and wants reassurance.

It is understood that business minister Andrew Griffiths has been asked to appear in front of the food and rural affairs committee in preliminary hearings, the report continued.

As reported, business secretary Greg Clark has asked the CMA to consider the merger’s potential impact on suppliers.

The report quoted J Sainsbury, which said on Saturday evening, 19 May that it strongly believes the merger will be of benefit to both suppliers and customers. Asda noted its long-term associations with its suppliers.

Asda is a subsidiary of the Bentonville, Arkansas-based general retailer Walmart Inc