SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No.  )
Altaba Inc.
(Name of Issuer)
Common Stock, $0.001 par value
(Title of Class of Securities)
021346101
(CUSIP Number)
Mr. Christopher Hohn
TCI Fund Management Limited
7 Clifford St
London W1S 2FT, United Kingdom
44 20 7440 2330   with a copy to:   Eleazer Klein, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 15, 2018
(Date of Event which Requires
Filing of this Schedule)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. x

 

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

 

(Continued on following pages)

(Page 1 of 8 Pages)

--------------------------

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

1	NAME OF REPORTING PERSON TCI Fund Management Limited
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United Kingdom
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 79,773,273
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 79,773,273
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 79,773,273
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 9.7%
14	TYPE OF REPORTING PERSON CO

 

 

1	NAME OF REPORTING PERSON Christopher Hohn
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United Kingdom
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 79,773,273
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 79,773,273
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 79,773,273
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 9.7%
14	TYPE OF REPORTING PERSON IN

 

 

Item 1.

SECURITY AND ISSUER.

 

This statement on Schedule 13D relates to the shares ("Shares") of common stock, par value $0.001 per share, of Altaba Inc., a Delaware corporation (the "Company"). The principal executive office of the Company is located at 140 East 45th Street, 15th Floor, New York, New York 10017.

Item 2.

IDENTITY AND BACKGROUND.

 

(a) This statement is filed by: (i) TCI Fund Management Limited, a United Kingdom private limited company ("TCIF UK"), with respect to the Shares, held by The Children's Investment Master Fund, a Cayman Islands exempted company (the "TCI Fund"); and (ii) Christopher Hohn ("Mr. Hohn", and together with TCIF UK, the "Reporting Persons"), with respect to the Shares directly held by the TCI Fund.

(b) The principal business address of the Reporting Persons is 7 Clifford Street, London, W1S 2FT, United Kingdom.

(c) The principal business of the Reporting Persons is investing for accounts under their management.

 

(d) None of the Reporting Persons have, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

 

(e) None of the Reporting Persons have, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) TCIF UK is a private limited company organized under the laws of the United Kingdom. Mr. Hohn is a citizen of the United Kingdom.

Item 3.

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

 

The 79,773,273 Shares reported herein as beneficially owned by the Reporting Persons were purchased using working capital of the TCI Fund at an aggregate cost of approximately $2,932,416,106.

 

Item 4.

PURPOSE OF TRANSACTION.

 

The Reporting Persons acquired the Shares to which this Schedule 13D relates in the ordinary course of business for investment purposes because they believed that the Shares were undervalued and represented an attractive investment opportunity. The Reporting Persons also have short positions in Alibaba Group Holding Limited and Yahoo Japan Corporation.

 

On March 15, 2018, the Reporting Persons sent to the Company a letter (the "March 15, 2018 Letter") and a presentation (the "March 15, 2018 Presentation") setting forth its view that it is in the best interest of the Company and its shareholders for the Company to adopt a plan of liquidation. The Reporting Persons believe that the liquidation proceeds should be returned to shareholders in the most tax efficient manner possible, taking into account that a large portion of the Company's shareholder base is non-U.S. A copy of the March 15, 2018 Letter is filed herewith as Exhibit 99.2 and a copy of the March 15, 2018 Presentation is filed herewith as Exhibit 99.3.

 

The Reporting Persons intend to consider, explore and/or develop plans and/or make proposals (whether preliminary or final) with respect to the matters set forth in the March 15, 2018 Letter and March 15, 2018 Presentation and intend to further discuss with the Company's management and Board of Directors (the "Board") and send presentations and other materials to the Company with respect to the foregoing. The Reporting Persons may consider, explore and/or develop plans and/or make proposals (whether preliminary or final) with respect to, among other things, the Company's operations, management, the composition of the Board, capital or corporate structure, capital allocation policies, strategy and plans, or may change their intention with respect to any and all matters referred to in this Item 4. The Reporting Persons may communicate with the Company's management, Board, other shareholders or third parties regarding the foregoing. The Reporting Persons may exchange information with any such persons pursuant to appropriate confidentiality or similar agreements.

 

The Reporting Persons intend to review their investment in the Company on a continuing basis and depending upon various factors, including, without limitation, the Company’s financial position and strategic direction, overall market conditions, the outcome of any discussions referenced above, other investment opportunities available to the Reporting Persons, and the availability of securities of the Company at prices that would make the purchase or sale of such securities desirable, the Reporting Persons may endeavor (i) to increase or decrease their position in the Company or the Company's investments through, among other things, the purchase or sale of securities of the Company or the Company's investments, including through transactions involving Shares and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon or relate to the value of securities of the Company or the Company's investments in the open market or in private transactions, including through a trading plan created under Rule 10b5-1(c) or otherwise, on such terms and at such times as the Reporting Persons may deem advisable; and/or (ii) to enter into transactions that increase or hedge their economic exposure to the Shares or the Company's investments without affecting their beneficial ownership of Shares. The Reporting Persons may from time to time have long or short exposure to the Company's investments. In addition, the Reporting Persons may, at any time and from time to time, (i) review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto and (ii) propose or consider one or more of the actions described in subparagraphs (a) - (j) of Item 4 of Schedule 13D.

 

Item 5.

INTEREST IN SECURITIES OF THE COMPANY.

 

(a) The aggregate percentage of Shares reported to be beneficially owned by the Reporting Persons is based upon 824,921,315 Shares outstanding which is the number of Shares reported to be outstanding as of December 31, 2017, as reported in the Company's Form N-CSR filed with the Securities and Exchange Commission (the "SEC") on February 26, 2018.

As of the date hereof, the Reporting Persons may be deemed to beneficially own 79,773,273 Shares, representing approximately 9.7% of the Shares outstanding.

TCIF UK is the investment manager of the TCI Fund. Christopher Hohn is the Managing Director of TCIF UK. By reason of the provisions of Rule 13d-3 of the Act, Mr. Hohn may be deemed to beneficially own the Shares held by the TCI Fund.

The filing of this statement should not be construed as an admission that any of the Reporting Persons is, for the purposes of Sections 13 of the Securities Exchange Act of 1934, the beneficial owner of the Shares reported herein.

(b) The Reporting Persons have shared voting and dispositive power over 79,773,273 Shares.

(c) Information concerning transactions in the Shares effected by the Reporting Persons during the past sixty days is set forth in Schedule A hereto and is incorporated herein by reference. All of the transactions in Shares listed hereto were effected in the open market through various brokerage entities.

(d) No person other than the Reporting Persons and the TCI Fund is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares. The TCI Fund has the right to receive dividends from, and proceeds from the sale of, more than 5% of the Shares.

(e) Not applicable.

 

Item 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

 

Except as otherwise set forth herein, the Reporting Persons have no contracts, arrangements, understandings or relationships with any person with respect to the securities of the Company.

Item 7.	MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99.1:		Joint Filing Agreement.
Exhibit 99.2:		March 15, 2018 Letter.
Exhibit 99.3:		March 15, 2018 Presentation.

 

 

 

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: March 15, 2018

 

 

TCI Fund Management Limited
/s/ Christopher Hohn
Name: Christopher Hohn
Title: Managing Director
/s/ Christopher Hohn
Christopher Hohn

 

 

 

 

Schedule A

 

Transactions in the Shares of the Company During the Last 60 Days

 

The following tables set forth all transactions in the Shares effected in the past sixty days by the Reporting Persons. Except as noted below, all such transactions were effected in the open market through brokers and the price per share is net of commissions. The price reported in the column Price Per Share ($) is a weighted average price . These Shares were purchased in multiple transactions at prices between the price ranges indicated in the column Price Range ($). The Reporting Persons will undertake to provide to the staff of the SEC, upon request, full information regarding the number of Shares sold at each separate price.

 

 

Trade Date	Shares Purchased (Sold)	Price Per Share ($)	Price Range ($)
1/18/2018	(750,000)	74.280	73.850 - 74.710
1/19/2018	(464,000)	74.079	73.710 - 74.630
1/22/2018	(350,000)	73.862	73.600 - 74.460
1/23/2018	(276,201)	75.380	75.295 - 76.290
1/23/2018	(273,799)	76.516	76.295 - 76.750
1/24/2018	(169,654)	77.961	77.580 - 78.575
1/24/2018	(30,346)	78.648	78.580 - 78.790
1/25/2018	(135,306)	77.725	77.350 - 78.320
1/25/2018	(14,694)	78.486	78.390 - 78.600
1/26/2018	(127,190)	79.477	79.050 -80.040
1/26/2018	(97,810)	80.158	80.050 - 80.245
1/29/2018	(100,000)	79.793	79.310 - 79.990
1/31/2018	(219,600)	79.596	79.150 - 80.140
1/31/2018	(30,400)	80.317	80.150 - 80.395
2/1/2018	(25,000)	76.374	76.300 - 76.475
2/2/2018	(25,000)	76.061	76.000 - 76.100
2/5/2018	(28,700)	73.851	73.500 - 74.470
2/5/2018	(71,300)	74.714	74.500 - 75.330
2/6/2018	(100,000)	72.739	72.200 - 73.075
2/7/2018	(80,000)	73.729	73.605 - 73.821
2/8/2018	(45,840)	71.851	71.500 -72.495
2/8/2018	(4,160)	72.542	72.500 - 72.565
2/9/2018	(109,468)	68.336	68.000 - 68.740
2/9/2018	(157,800)	69.484	69.000 - 69.507
2/9/2018	(193,450)	70.346	70.000 - 70.770
2/12/2018	(90,597)	70.916	70.500 - 71.045
2/12/2018	(73,121)	71.206	71.050 - 71.670
2/13/2018	(135,578)	71.617	71.000 - 71.990
2/13/2018	(60,500)	72.135	72.000 - 72.370
2/14/2018	(65,359)	72.150	71.850 - 72.350
2/14/2018	(98,039)	73.279	73.040 - 73.510
2/15/2018	(117,189)	74.142	73.500 - 74.490

 

2/15/2018	(13,529)	74.573	74.500 - 74.690
2/16/2018	(76,130)	74.266	74.000 - 74.600
2/20/2018	(75,000)	74.509	74.330 - 74.700
2/21/2018	(125,000)	76.107	75.830 - 76.600
2/23/2018	(91,247)	76.590	76.250 - 77.248
2/23/2018	(33,753)	77.458	77.250 - 77.550
2/26/2018	(175,000)	77.619	77.200 - 78.080
2/27/2018	(100,000)	76.118	76.000 - 76.465
2/28/2018	(200,000)	75.182	74.800 - 75.560
3/1/2018	(186,107)	73.932	73.500 - 74.360
3/1/2018	(13,893)	74.632	74.620 - 74.648
3/2/2018	(217,127)	72.307	71.725 - 72.720
3/2/2018	(32,873)	72.761	72.728 - 72.835
3/5/2018	(95,598)	72.534	72.090 - 73.070
3/5/2018	(2,760)	73.145	73.090 - 73.200
3/6/2018	(128,639)	75.159	74.490 - 75.450
3/7/2018	(63,922)	75.199	74.850 - 75.510

 

Exhibit 99.1

JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

Dated: March 15, 2018

 

TCI Fund Management Limited
/s/ Christopher Hohn
Name: Christopher Hohn
Title: Managing Director
/s/ Christopher Hohn
Christopher Hohn

 

Exhibit 99.2

 

Thomas J. McInerney,

CEO

Altaba Inc.

 

15 March 2018

 

Dear Tom,

 

As you know TCI is the largest shareholder of Altaba owning close to 10% of the company. We have very much appreciated your efforts to create shareholder value. We fully agree with your explicit goal of narrowing the wide discount to net asset value at which Altaba continues to trade.

 

However, we believe that the current strategy of Altaba is unlikely to materially reduce this discount. A clear plan of liquidation is now necessary. This should involve a complete distribution or sale of all of Altaba’s Alibaba and Yahoo Japan shares.

 

We attach a presentation for the Board and shareholders of Altaba laying out in summary our proposed plan of liquidation. We strongly believe that the vast majority of Altaba’s shareholders would be supportive of this plan.

 

We have today converted our SEC filing to a 13D so that we may engage actively with you, the Board of Altaba and all shareholders to create the best outcome for all parties. We look forward to engaging with you constructively as you consider our proposal.

 

Yours sincerely,

 

 

/s/ Sir Christopher Hohn

Sir Christopher Hohn

 

Enc.

 

 

 

 

7 Clifford Street, London, W1S 2FT Telephone: +44 (0) 20 7440 2330

 

TCI Fund Management Limited is a private limited company incorporated and existing under the laws of England and Wales with registered number 08898250

 

Authorised and regulated by the Financial Conduct Authority

Exhibit 99.3

 

Private & confidential Intended solely for recipient Proposal for a Plan of Liquidation of Altaba

Altaba - 2 - The current strategy Altaba has announced the intention to sell its Yahoo Japan stake Altaba has announced a share repurchase plan Altaba is evaluating options for monetising its Alibaba stake The current discount to NAV of 26% significantly exceeds the tax liability on liquidation Altaba is rightly focused on reducing the discount to NAV

Altaba - 3 - The current strategy is unlikely to materially reduce the discount to NAV 65% of Altaba shareholders are non - US and subject to dividend withholding making Altaba tax inefficient relative to Alibaba Altaba is not included in indices and therefore remains off - limits for long - only funds and ETFs Corporate tax rates might rise in the future No natural shareholder base A gradual sale of assets will delay shareholder returns

Altaba - 4 - Corporate tax rates may increase But rising budget deficits may lead to higher future tax rates Altaba should crystallise the benefits of US tax reform before tax rates increase Only immediate monetisation of assets can crystallise current tax rates US tax reform has provided an opportunity to Altaba to monetise its assets

Altaba - 5 - A Plan of Liquidation would narrow the discount to NAV Source: Duff & Phelps. Blockage Discount is the impact of liquidating a large amount of stock in a finite time frame effectively depressing the market price Duff & Phelps estimates that the Blockage Discount could be up to 15% of the value of Alibaba shares A Blockage Discount for tax can be applied if Alibaba shares are distributed Altaba would distribute to its shareholders around 80% of its Alibaba shares Such a distribution would not be subject to dividend withholding tax Altaba would sell 20% of its Alibaba shares to pay tax and create reserves

Altaba - 6 - A Plan of Liquidation will reduce the effective tax rate and the discount to NAV The effective tax rate could decline to 17 - 18% with a Blockage Discount Source : Altaba, Duff & Phelps and Bloomberg.

Altaba - 7 - Timeline & Process Timeline of 9 to 12 months to distribute the vast majority of Altaba’s assets Alibaba would file a Resale Registration Statement on Form F - 3 pursuant to the Registration Rights Agreement (RRA) SEC approves Definitive Proxy Statement (65 to 80 days) Special meeting for shareholders. Delaware Law and 1940 Act require 50% of outstanding shares of Altaba voting in favour to approve the Plan Distribute 80% of Alibaba shares Sell 20% of Alibaba shares to pay the tax liability and contingency reserves

Altaba - 8 - Source : Akin Gump, Duff & Phelps and Bloomberg. The Blockage Discount is subject to different valuation methodologies Firm underwritten offers from investment banks for the entire Alibaba stake Longer liquidation period and downside protected with put options 20 to 27% discount 15% discount 15 to 20% range A Blockage Discount of 15 to 20% is possible

Altaba - 9 - Source : PWC, Akin Gump, Duff & Phelps and Altaba. A low effective tax rate can be achieved in a Plan of Liquidation US federal tax rate Impact of Blockage Discount (at a 15% assumption) 21% - 3% Impact of State and Local Taxes 0% to +1% Impact of Tax Basis (over $4 Bn ) - 1% Effective tax rate 17 - 18%

Altaba - 10 - Yahoo Japan Yahoo Japan shares should either be sold or distributed to shareholders Altaba should request this consent from Softbank to increase options Distribution likely requires Softbank consent The limited free float and Altaba’s 35% ownership can justify a high Blockage Discount If consent is given, a distribution may be superior to a sale

Altaba - 11 - Alibaba may bid for Altaba A Plan of Liquidation limits the window of opportunity for Alibaba to bid for Altaba A share for share bid creates value for Alibaba Any bid needs to be superior to a Plan of Liquidation

Altaba - 12 - Alternatives to a Plan of Liquidation A voluntary offer of exchange of Alibaba shares for Altaba shares Sale of Alibaba shares with proceeds used to repurchase Altaba shares An all stock bid by Alibaba for all of Altaba All alternatives must be superior to a Plan of Liquidation factoring in time value

Disclaimer - 13 - This document is being issued by TCI Fund Management Limited and the information contained herein may not be reproduced, dist rib uted or published by any recipient for any purpose without the prior consent of TCI Fund Management Limited. By accepting these materials, you hereby ack nowledge and agree to all of the terms and conditions in this disclaimer and disclosure statement. This document is not classified as a financial promotion. TCI Fund Management Limited is authorised and regulated by the Financial Conduct Authority of the United Kingdom. The information and opinions contained in this document are for background purposes only, do not purport to be full or complete and do not constitute investment advice. Thi s d ocument does not constitute or form part of any offer to issue or sell, or any solicitation of an offer to subscribe or purchase any investment in any jurisdicti on nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. This document does not constitute a recommendation to any shareholder as to how such shareholder should vote, tender or act with respect to any transaction or matter. Certain information contained herein may constitute forward - looking statements. Due to various uncertainties and actual events, including those discussed herein, recipients should not rely on such forward - looking statements. Any target objectives are goals only, are not projections or pred ictions, and are presented solely for your information. The body of this document is supplemented by footnotes which identify TCI Fund Management Limited’s sources , a ssumptions, estimates, and calculations. This information contained herein should be reviewed in conjunction with the footnotes. The views expressed her ein represent the current opinions as of the date hereof of TCI Fund Management Limited and are based on publicly available information regarding Altaba Inc. (" Altaba "). Certain financial information and data used herein have been derived or obtained from, without independent verification, public filings, including filings made by Altaba with the Securities and Exchange Commission (“SEC”) and other sources. TCI Fund Management Limited is an independent company, and its opinions and projections wi thin this presentation are not those of Altaba and have not been authorized, sponsored, or otherwise approved by Altaba . No reliance may be placed for any purpose on the information and opinions contained in this presentation or their accuracy or completeness. No representation, warranty or undertaking, express or impl ied , is given as to the accuracy or completeness of the information or opinions contained in this presentation by any of TCI Fund Management Limited, its directo rs, affiliates or employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. TCI Fund Management Limited currently holds a substantial amount of securities of Altaba and short positions in Alibaba Group Holding Limited and Yahoo Japan Corporation. TCI Fund Management Limited may, from time to time, sell all or a portion of such securities in open market tran sac tions or otherwise (including via short sales), buy additional units (in the open market, through privately negotiated transactions or otherwise), or trade in option s, puts, calls or other derivative instruments relating to such securities. Certain information contained herein, including projections, market outlooks, assumptions, opinions and estimates made by TCI Fu nd Management Limited, may constitute forward - looking statements. Such forward - looking statements are based on certain assumptions and involve certain risk s and uncertainties, including risks and changes affecting industries generally and Altaba specifically. Given the inherent uncertainty of projections and forward - looking statements, you should be aware that actual results may differ materially from the projections and other forward - looking statements contained herein due to reas ons that may or may not be foreseeable. Therefore, due to various uncertainties and actual events, including those discussed herein, recipients should n ot rely on such forward - looking statements. Any target objectives are goals only, are not projections or predictions, and are presented solely for your information. TCI Fund Management Limited, 7 Clifford Street, London, W1S 2FT, UK