Third Point owns Salesforce stake, talks Bath & Body Works changes

By Svea Herbst-Bayliss

NEW YORK (Reuters) – Hedge fund Third Point LLC owns a stake in Salesforce Inc at the same time the software company is facing pressure from four activist investment firms pushing for changes, sources familiar with the matter said on Wednesday.

The size of Third Point’s stake could not be learned. The hedge fund, which invests $12.6 billion in assets and sometimes plays the role of corporate agitator, has a broad investment mandate and owns dozens of stocks and other securities in its portfolio.

Third Point declined to comment on its stake, which was first reported by the Wall Street Journal.

Salesforce has been a magnet for activist investors with Elliott Management, Starboard Value, Inclusive Capital Partners and ValueAct all owning stakes.

These firms have said publicly and privately that they would like to see changes at Salesforce.

Last month Salesforce appointed three new directors, including the head of ValueAct, Mason Morfit, to join the board on March 1.

Elliott, the biggest among the four activists, has laid the groundwork for a board challenge as it was recently interviewing director candidates. The window to nominate at Salesforce opens on February 12.

Often investors pile into stocks where one or more activists have taken positions in the hopes that their complaints will lead to positive changes and push the share price higher.

Third Point on Wednesday updated its own investors about other investments, including one in Bath & Body Works , where the firm hinted last year that it might mount a boardroom challenge.

In the letter, Third Point’s founder billionaire investor Daniel Loeb wrote that he sees a chance to work “constructively” with Bath & Body Works to “address its apparent governance issues and help it realize its significant potential.”

He praised the company, which had been without a chief executive for months, for selecting Gina Boswell from Unilever. She took over in December from Andrew Meslow who had stepped down in May. But Loeb said she faces a big task of transforming it from largely a U.S. retailer of soaps and candles to a more global “direct-to-consumer home and personal care brand.”

“We believe BBWI can change its equity story, improve its earnings power, and earn a more premium valuation,” Loeb wrote.

Third Point also said it took a new position in American International Group, a global property and casualty insurer. “AIG’s strong fundamental operating results coupled with the catalysts following the separation of Corebridge position should help AIG close that substantial valuation discount,” Loeb wrote in the letter seen by Reuters.

Last year TP Partners lost 21.7% even as the fund’s annualized net return remains at 16%. Last years biggest losers included Walt Disney Co and Amazon.com while Bath & Body Works counted among its biggest winners.

(Reporting by Svea Herbst-Bayliss; editing by Diane Craft)