A Boston-based hedge fund called Adage Capital is a big winner in the Kraft/Heinz mega merger making $US50 million over night.
On Wednesday morning, Warren Buffett’s Berkshire Hathaway and Brazilian private equity firm 3G Capital said H.J. Heinz would merge with publicly-traded Kraft Foods to form the third largest food and beverage company in North America.
Shares of Kraft ripped on Wednesday. The food company’s stock was last trading up about up $US19.68, or 32.1%, at around $US81.01 per share.
Adage Capital Management, founded by former Harvard Endowment equity analysts
Phill Gross and Robert Atchinson in 2001, is the largest hedge fund shareholder of Kraft. (By the way, we wrote about Adage Capital last summer when the fund made close to $US1 billion on one biotech stock.)
Adage Capital last held around 2,565,335 shares of Kraft at the end of the fourth quarter, according to the latest available data compiled by Bloomberg.
The fund had sold 535,700 shares of its Kraft stake in the fourth quarter ended 12/31/2014, the data shows. The position also makes up only 0.4% of the fund’s portfolio. (Keep in mind, Adage could have traded in or out of the position since that time. Funds only have to disclose their long equity holdings 45 days after the end of each quarter.)
Regardless, the stock’s been a winner for Adage.
This morning alone, Adage’s stake increased by about $US50.4 million. The fund’s overall stake now has a current market value of $US208.04 million, according to our calculations.
Adage has been an investor in Kraft for many years, according to securities filings.
In September 2012, Mondelez International, formerly Kraft Foods, spun off Kraft Foods Group and the company began trading under the ticker symbol KRFT. Adage has continued to be a shareholder. Since that time, shares of Kraft shares are up more than 78%.
Here’s a chart: