Activist company

Third Point takes a stake in Cano Health and pushes for the sale of the company

BOSTON, March 9 (Reuters) – Hedge fund Third Point LLC is pushing Cano Health (CANO.N) to put itself up for sale because the aged care facility operator’s share price fell since going public with a blank check company.

The New York-based company, led by billionaire investor Daniel Loeb, said in a regulatory filing 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, according to the filing.

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Loeb, who has led activist campaigns at Baxter International (BAX.N) and Campbell Soup Company and recently pushed Intel Corp for changes, said his company is not currently seeking board seats. The filing says the company has “confidence” in the company’s strategy and management team.

But that could change, according to the filing, if the company fails to close the “value gap” between its stock price and the company’s intrinsic value.

Cano’s share price weakness is related to investors’ “widely unfavorable view of companies going public through special purpose acquisition vehicles,” Loeb wrote. He urged the company to hire bankers and lawyers to review strategic alternatives and said “that strategic review should focus on a sale.”

Cano Health completed its merger with investor Barry Sternlicht’s special purpose acquisition company in June and its share price has lost more than half its value. On Wednesday, the stock price jumped 40% following the Third Point news, valuing the company at $3 billion.

Cano said in a statement that it is “successfully executing its strategy” and that the business has strong momentum, “as evidenced by our 115% year-over-year growth in 2021 and continued growth through ‘in 2022’. The company, which operates primary care medical centers in eight U.S. states and Puerto Rico, also said it welcomes shareholder prospects.

Third Point participated in a private placement alongside Sternlicht and Fidelity Management & Research Company and BlackRock, according to a statement made when the deal was announced.

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Reporting by Svea Herbst-Bayliss in Boston and Leroy Dsouza in Bengaluru; Editing by Lisa Shumaker

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