Third Point is taking over a stake in Cano Health, seeking a sale from Reuters

Third Point is taking over a stake in Cano Health, seeking a sale from Reuters

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© Reuters. FILE PHOTO: Photo illustration shows a stethoscope and blood pressure monitor of a French general practitioner on display at a Bordeaux office on January 7, 2015. REUTERS / Regis Duvignau / File Photo

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Author: Svea Herbst-Bayliss

BOSTON (Reuters) – Hedge fund Third Point LLC is forcing Cano Health to put up for sale because the share price of the operator of institutions for the elderly has weakened since it went public with the blank check company.

The New York-based company, led by billionaire investor Daniel Loeb, said in a regulatory submission that it now owns 6.4% of the Miami-based company, making it the third-largest investor.

Third Point, which is investing $ 18 billion, spent $ 106 million to buy 11.5 million shares, the report said.

Loeb, who led activist campaigns at Baxter International (NYSE 🙂 and Campbell soup Company (NYSE 🙂 and recently pushed Intel Corp. (NASDAQ 🙂 to make changes, said his firm is not currently seeking board seats. The submission states that the company has “confidence” in the company’s strategy and management team.

But that could change, the submission says, if the company fails to resolve the “value gap” between the share price and the company’s intrinsic value.

The low price of Cano shares is due to the fact that investors have “mostly unfavorable views of companies that have been publicly announced through special purpose procurement funds,” Loeb wrote. He urged the company to hire bankers and lawyers to review strategic alternatives and said “this strategic audit should focus on sales.”

Cano Health closed its merger with special purpose acquisition company investor Barry Sternlich in June, and the stock price lost more than half its value. On Wednesday, the stock price rose 40% on news that Third Point was involved, estimating the company at $ 3 billion.

Cano said in a statement that “he is successfully implementing his strategy” and that the business has a strong momentum, “which shows our membership growth of 115% compared to the previous year in 2021 and continued growth in 2022.” The company, which operates primary care health centers in eight U.S. states and Puerto Rico, also said it welcomes shareholder perspectives.

Third Point participated in the private placement together with Sternlicht and Fidelity Management & Research Company and BlackRock 🙂 (NYSE :), according to a statement given when the deal was announced.

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