It was a long road to turning bagels into big bucks for hedge fund titan David Einhorn, but with Monday's announcement that a German firm would orchestrate a buyout of The Einstein Noah Restaurant Group, in which Einhorn's fund Greenlight Capital is a major investor, it looks as though Einhorn is finally going to make some serious dough.
According to Securities and Exchange filings for Greenlight, the fund owns around 6.7 million shares of Einstein Noah, which it has held from the company's beginnings on the public market, when it IPO'ed in June 2007 at $18 per share. That means that on the shares Greenlight currently holds alone, the fund made more than $15 million since the IPO, as the German holding company JAB announced its proposed $347 million acquisition of the bagel maker at the price of $20.25 per share.
The news made shares of Einstein Noah, which had been trading around the $13 mark, jump 50% at market opening on Monday to $20.11 each on the news. In a statement, Einhorn called the buyout deal "a win-win for all parties" and said that Greenlight had been working with the struggling company for more than a decade on an improvement strategy.
Indeed, Einstein Noah's stock had struggled to stay above its $18 per share pricing in the more than seven years since its IPO, only cracking that number twice since early 2008, and hovering around the $15-per-share mark for years. Einhorn's fund even sold out of a total of 4 million shares, ditching 1.5 million and 2.5 million of them in the third and fourth quarters of last year, respectively, according to filings.