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D.E. Shaw Builds Activist Stake in Lowe’s

Ed Hammond, Scott Deveau
Vehicles sit outside a Lowe's store in East Peoria, Illinois.

Investor D.E. Shaw & Co. has built an active stake in U.S. home retailer Lowe’s Cos., according to people familiar with the matter.

While D.E. Shaw’s specific plans for the investment couldn’t immediately be learned, the firm does plan to use its holding to agitate for changes at Lowe’s, the people said, asking not to be identified as the details aren’t public. Activist investors typically take stakes in companies and push for changes to strategy, spending, management and board members.

A spokesman for New York-based D.E. Shaw declined to comment. A representative for Lowe’s declined to comment.

Lowe’s shares rose as much as 4.5 percent. The stock traded up 3.1 percent in New York at 2:43 p.m., valuing the company at about $82 billion. Rival Home Depot Inc. rose as much as 2.3 percent.

Lowe’s, based in Mooresville, North Carolina, has been locked in a battle with larger rival Home Depot as both chains seek to avoid the malaise that has plagued the retail industry. The company has struggled to break out of its role as the industry’s second fiddle, lagging behind Home Depot in sales growth.

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While construction needs after Hurricanes Harvey and Irma helped lift Lowe’s third-quarter same-store sales, the company left its full-year profit forecast unchanged, missing Wall Street estimates.

D.E. Shaw has launched a new activist platform under portfolio manager Quentin Koffey, who joined the firm in June. Koffey was previously a portfolio manager at Paul Singer’s Elliott Management Corp. D.E. Shaw disclosed a small 0.12 percent stake in the company in a November filing.

In October, D.E. Shaw disclosed a stake in EQT Corp. and agitated for the company to spin out its midstream assets, among other measures to improve shareholder value.

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