Must-know: Eric Mindich and Eton Park's 4Q13 positions (Part 2 of 8)
Eton Park Capital Management and Teekay Corp.
Eric Mindich’s Eton Park Capital Management bought shares in Teekay Corp. (TK), General Motors Co. (GM), Allegion Plc (ALLE), and Air Products & Chemicals Inc. (APD). The fund exited positions in Twenty-First Century Fox (FOXA), cable company Liberty Global (LBTYK), and retailer Dollar Tree (DLTR).
Teekay Corp (TK) is a brand new position initiated by Eton Park in the fourth quarter. It accounts for 2.70% of the fund’s portfolio.
Teekay is a leading provider of international crude oil and gas marine transportation services, and the company also offers offshore oil production, storage, and offloading services, primarily under long-term, fixed-rate contracts. Through its general partnership interests in two master limited partnerships, Teekay LNG Partners L.P. (TGP) and Teekay Offshore Partners L.P. (TOO), its controlling ownership of Teekay Tankers Ltd. (TNK), and its fleet of directly owned vessels, Teekay is responsible for managing and operating consolidated assets of over $11 billion, comprised of approximately 165 liquefied gas, offshore, and conventional tanker assets.
Market Realist recently reported that shares have climbed a bit since February 20, 2014, after Teekay Tankers beat estimates and several Wall Street analysts had upgraded most crude tanker stocks. Teekay Corporation reported consolidated adjusted net income of $1.1 million or $0.02 per share for the fourth quarter of 2013, compared to $2.9 million or $0.04 per share in the same period of the prior year. The slight decrease in net income was due to lower revenues from Teekay’s floating production, storage, and offloading fleet as a result of operational issues and off-hire time experienced in 2013.
For 4Q 2013, Teekay Offshore increased its common unit quarterly cash distribution by 2.5%, or $0.0131 per unit, to $0.5384 per common unit. The cash distribution received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay Offshore totaled $17.7 million for 4Q. Teekay LNG increased its common unit quarterly cash distribution by 2.5%, or $0.0168 per unit, to $0.6918 per common unit. The cash distribution received by Teekay Parent totaled $25.0 million for 4Q.
In January, Teekay and Teekay Tankers jointly announced the creation of Tanker Investments Ltd. (TIL), which will seek to opportunistically acquire, operate, and sell modern secondhand tankers to benefit from an expected recovery in the current cyclical low of the tanker market. TIL has completed a $250 million private equity offering in which Teekay Tankers and Teekay have co-invested $25 million each for a combined 20% ownership interest in the new company. Under the transaction:
- A portion of the net proceeds from the private equity offering will be used to acquire four 2009- and 2010-built Aframax crude oil tankers for an aggregate purchase price of approximately $116 million.
- TIL will also acquire four 2009-built Suezmax crude oil tankers from Teekay for an aggregate purchase price of approximately $163 million.
Looking ahead, Teekay expects to execute on its biggest project, the Petrojarl Knarr FPSO. The Knarr FPSO is expected to commence its ten-year time-charter with the BG Group in the fourth quarter of 2014, following delivery and transport from the shipyard, and installation on the Knarr field in the North Sea.
For more on trends in Teekay’s sector, please read Why oil tankers could follow the dry bulk shipping recovery.
Browse this series on Market Realist:
- Part 1 - Must-know: Eric Mindich and Eton Park’s 4Q13 positions
- Part 3 - Eton Park reports a new position in General Motors
- Part 4 - Eton Park Capital buys a new position in Allegion
- Oil, Gas, & Consumable Fuels
- Investment & Company Information
- Eton Park Capital Management
- Eton Park
- Eric Mindich