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Hedge fund Elliott in talks to acquire Cubic

Hedge fund Elliott Management Corp said on Monday it had partnered with a private equity firm to acquire Cubic Corp after amassing a 15% stake in the U.S. defense and transportation technology company.

By Rebecca Spalding

Sept 21 (Reuters) - Hedge fund Elliott Management Corp said on Monday it had partnered with a private equity firm to acquire Cubic Corp CUB.N after amassing a 15% stake in the U.S. defense and transportation technology company.

Cubic said that it would consider any offer that was fair and in the best interests of its shareholders, but that it had also adopted a poison pill to allow it to take "informed decisions" without pressure.

The poison pill will be activated and trigger dilution should any investor take a stake of as low as 15% in the company, Cubic said. Elliott will be grandfathered in but will not be allowed to increase its stake further without triggering the poison pill, Cubic added.

Elliott said it was disappointed Cubic had adopted a poison pill, but that it was pleased that the company's board had made clear it would engage in good faith. "We are fully prepared to acquire Cubic and look forward to immediate engagement with the company," partner Jesse Cohn and portfolio manager Marc Steinberg said in the release. Elliott did not disclose the name of the buyout firm it was partnering with on its bid. Cubic's shares rose 30.1% to $57.74 on the news, giving the company a market capitalization of close to $2 billion. Cubic's shares had slid this year as investors worried that the coronavirus outbreak may weigh on the growth of some of its business lines, including helping subway systems modernize how fares are collected. The San Diego, California-based company recently laid out a strategic plan to drive growth in the coming years.

(Reporting by Rebecca Spalding and Aurora Ellis)

((Rebecca.Spalding@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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