Activist hedge fund Elliott Management disclosed on Monday that it has built a 13.8% stake in E2open (NYSE:ETWO) and may seek to acquire the company.
Elliott disclosed it acquired a total of 27,250,000 shares of the supply chain management software provider at an average price of $2.55 per share. Further, the fund entered into derivative agreements in the form of cash settled swaps on another 14,526,506 shares. In all, the fund has a combined economic exposure of approximately 13.8%. Shares were being bought in the open market by Elliott as recently as October 12. As of the end of June, the fund held a 6.8% stake.
Elliott views the stock as undervalued and represents an attractive investment opportunity. The fund said it will seek talks with the Board about strategic opportunities to maximize shareholder value and may seek to engage in a transaction "as an acquirer, investor and/or financing source."
Shares of E2open were down 58.3% year-to-date as of Friday's close. They are up 22% in early trading Monday amid the Elliott news.