Billionaire Mario Gabelli is an American businessman and hedge fund manager who founded GAMCO Investors in 1977. GAMCO Asset Management Inc. and Gabelli Funds, LLC own 5.2% and 2.23% positon in Steel Excel Inc (OTCMKTS:SXCL), according to a latest SCHEDULE 13D filing with the SEC on December 22. GAMCO Asset Management Inc. now owns 565,982 shares of the California-based company. The position is not “completely passive” according to the filing. Mario Gabelli has also sent a letter to the principal Executive Officer of Steel Partners Holdings LP (NYSE:SPLP), Jack Horward. Gabelli referred to a conversation and acknowledged that the company has agreed to offer “liquidity event” to its shareholders where 20% can be put at the option of the shareholders at the end of the third year on a prorated basis. The shareholders would receive cash during the put period as well as at the end of the seven year holding period. Gabelli added that Steel Partners Holdings LP (NYSE:SPLP) has also agreed to offer a cumulative dividend on the new preferred. The letter said that if these conditions are incorporated into Steel Partners’ proposal, it is likely that the fund’s proxy voting committee would examine the final document sent to the shareholders in a more “favorable light”.
GAMCO has reservations on the buyout deal of Steel Excel by Steel Partners (NYSE:SPLP), the details of which were sent in a letter by Mario Gabelli on December 12 to Steel Partners. Firstly, Gabelli wanted the new publically traded company to be listed on NYSE. The fund also demanded a cumulative divided from the new preferred as it would be, according to the billionaire, “extremely unfair” to have a preferred that is callable at any time during the seven year period. In the letter, Gabelli had also demanded a liquidity event from the company whereby up to 25% of the shareholders’ holdings would be puttable at the new option.
Gabelli’s GAMCO and its affiliates collectively own about 1.2 million shares of Steel Excel Inc (OTCMKTS:SXCL) which account for about 12% of the company’s total float.
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Earlier this month, Steel Partners (NYSE:SPLP) and Steel Excel (NASDAQ:SXCL) entered into a definitive agreement which allowed Steel Partners to own the rest Steel Excel shares for $17.80 per share in SPLP preferred units. Steel Partners already owns 64% of Steel Excel shares. After the completion of the said transaction, Steel Excel will no longer be a publically traded company.