Third Point tells United Technologies that it opposes Raytheon merger
By Svea Herbst-Bayliss BOSTON (Reuters) - Billionaire investor Daniel Loeb said on Friday that his hedge fund Third Point LLC will vote against the planned merger of United Technologies Corp and Raytheon Co, saying there is no 'strategic rationale for this transaction.' 'We have concluded that the proposed combination of United Technologies and Raytheon is ill-conceived and unlikely to create value for UTC shareholders,' Loeb wrote in a letter to the board of directors at United Technologies.
By Svea Herbst-Bayliss
BOSTON (Reuters) - Billionaire investor Daniel Loeb said on Friday that his hedge fund Third Point LLC will vote against the planned merger of United Technologies Corp and Raytheon Co, saying there is no "strategic rationale for this transaction."
"We have concluded that the proposed combination of United Technologies and Raytheon is ill-conceived and unlikely to create value for UTC shareholders," Loeb wrote in a letter to the board of directors at United Technologies. Reuters saw a copy of the letter.
Loeb sent his letter three weeks after United Technologies announced a $120 billion merger with defense contractor Raytheon, making for one of the largest aero-defense deals ever.
Loeb criticizes management for turning back on plans to sharpen its focus and accountability by breaking itself into three businesses; aerospace, Otis elevators and Carrier air conditioners.
Neither United Technologies nor Raytheon was immediately available to comment.
Calling the planned merger a "baffling change in UTC’s strategy," Loeb wrote "the rationale for the breakup was to increase focus and accountability. This transaction represents a clear reversal."
Loeb is now the second powerful Wall Street investor to oppose the deal after rival hedge fund manager William Ackman wrote to United Technologies to complain even before the deal was publicly announced.
Both Loeb and Ackman, widely respected as powerful activist investors, pushed last year for the company to sharpen its focus and supported the planned split into three businesses.
Neither Loeb, whose firm owns 0.75 percent of the company, nor Ackman, whose Pershing Square Capital Management holds a 0.67 percent, would have the shares to single-handedly derail the deal. But both men said they are confident that other investors are similarly outraged and will also oppose it.
Both men accused United Technologies CEO Greg Hayes of trying to extend his reach with Loeb writing on Friday that a "sweetheart employment agreement" for Hayes would "entrench him for another half a decade ultimately as both CEO and Chairman of the Board!"
Bloomberg first reported that Loeb sent the letter to United Technologies.
United Technologies' deal with Raytheon faces regulatory hurdles. The U.S. Defense Department and big customers like Boeing Co, Lockheed Martin Corp and Northrop Grumman Corp will have a lot of clout in the antitrust review, and may worry about over-reliance on one company for a big suite of products.
(Reporting by Svea Herbst-Bayliss, with additional reporting by Rachit Vats; Editing by Chizu Nomiyama and Susan Thomas)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
By Jeff Mason WASHINGTON (Reuters) - U.S. President Donald Trump, facing the possibility of a cash crunch, said on Tuesday he would spend "whatever it takes" of his own money to finance his 2020 presidential campaign against Democrat Joe Biden if he had to
By Lisandra Paraguassu BRASILIA (Reuters) - Brazilian House Speaker Rodrigo Maia said on Tuesday that lawmakers are currently finalizing the text of a bill targeting those that finance "fake news" attacks on social media sites, adding that it could be voted on by the end of this year. The draft of the Brazilian bill was approved in the Senate on June 30, but the lower house created a working group to suggest modifications. Those changes will be finalized in two weeks, Maia said
DUBLIN (Reuters) - Ireland plans to allow the reopening of all pubs on Sept. 21, dropping a ban on bars that do not serve food, a senior minister said on Tuesday.