Loeb's Third Point makes big bet on Kraft

Fri Aug 3, 2012 3:08am IST

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* Kraft in top 5 positions at end of July

* Third Point flagship rose 1.6 pct last month

By Katya Wachtel

NEW YORK, Aug 2 (Reuters) - Hedge fund manager Daniel Loeb made a big wager on Kraft Foods in July, telling investors in his $8.7 billion firm that a stake in the food maker is now one of the firm's largest positions.

Loeb's Third Point listed Kraft as its fifth largest position as of July 31 in a monthly investor report obtained by Reuters.

The note does not indicate whether Loeb has a net long position or a short position in Kraft. If an investor is long, he expects the share price to rise; a short position indicates he expects the stock price to fall.

Third Point did not immediately return a request for comment.

Kraft, set to split into two separate companies in the next several months, replaced embattled natural gas producer Chesapeake Energy Corp as one of Third Point's top holdings.

In June, Loeb revealed he had amassed a major position in the energy company, but one month later it has slipped out of the top five. Sources told Reuters that Third Point held a position in Chesapeake bonds, and one source said the position was bullish.

The New York-based hedge fund did not own common stock in Kraft in the first quarter, according to a regulatory filing called a 13F, in which hedge funds disclose long equity holdings in given quarter. Those filings do not show a fund's short positions, and reveal very little in the way of bonds and other securities holdings that don't trade on exchanges.

Kraft Foods is expected to complete a split at the end of this year that will see a separation of its snack foods business, which is growing fast in emerging markets, from its slower-growing general grocery business.

Loeb joins other titan investors who have seen value in the Northfield, Illinois-based food maker. Warren Buffett's Berkshire Hathaway, William Ackman's Pershing Square and Nelson Peltz's Trian Fund Management have all owned large chunks of Kraft.

Ackman significantly reduced Pershing's investment in Kraft in the first quarter, slashing the stake by about 27 percent according to a regulatory filing. As of March 31, Pershing owned about 15.5 million shares. Ackman had pushed the company to split since buying up shares in 2010.

Kraft shares closed at $38.94 Thursday, down 1.14 percent. In after-hours trading the stock rose 0.67 percent to $39.20.

In addition to Kraft, Third Point's other top holdings at the end of July include Yahoo, gold, Apple and Delphi Auto.

Loeb's flagship Third Point Offshore fund gained 1.6 percent in July, boosting yearly returns to 5.5 percent. The broader stock market gained 1.4 percent last month, and was up 11 percent through July 31.

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