SCHEDULE 13D: Activist Investor Group Discloses 7.0% Stake in Calumet, Inc., Plans Governance Discussions

A group of investors led by Wasserstein Debt Opportunities Management, L.P. and Rajay Bagaria has disclosed a significant 7.0% beneficial ownership stake in Calumet, Inc., citing undervaluation and intentions to engage with management on corporate governance and board composition.

Summary

• A group of Reporting Persons, including Wasserstein Debt Opportunities Management, L.P., Wasserstein Debt Opportunities Master, LP, and individuals Rajay Bagaria and Joseph Dutton, have filed a Schedule 13D regarding their beneficial ownership in Calumet, Inc.
• The Reporting Persons collectively beneficially own 6,033,379 shares of Calumet, Inc. Common Stock, representing approximately 7.0% of the outstanding shares as of January 13, 2025.
• The Master Fund directly owns 4,176,672 shares (4.9%), while 1,507,160 shares (1.8%) are held in separately managed accounts managed by the Adviser.
• Rajay Bagaria directly owns 349,547 shares (<1%) and Joseph Dutton directly owns 3,305 shares (<1%).
• The aggregate purchase price for the Master Fund's shares was approximately $41,664,113, for the Accounts' shares was approximately $26,511,258, for Mr. Bagaria's shares was approximately $2,684,998, and for Mr. Dutton's shares was approximately $42,172.
• The shares were acquired with working capital, which may include margin loans, and personal funds.
• The Reporting Persons believe the shares were undervalued and represent an attractive investment opportunity.
• They intend to engage in discussions with Calumet, Inc.'s board of directors and management regarding enhancing corporate governance, including potential changes to the board's composition.

Sentiment

Score: 7

Explanation: The sentiment is positive from the activist investor's perspective, indicating a belief in undervaluation and a proactive approach to unlock value through governance and strategic discussions. This could be seen as a positive catalyst for the company's stock, assuming the market views the activist's intentions favorably.

Positives

• The Reporting Persons believe Calumet, Inc. shares are undervalued, suggesting potential for price appreciation.
• The investor group intends to engage with management to enhance corporate governance, which could lead to improved operational and financial performance.
• Potential changes to the Board composition could bring fresh perspectives and strategic direction.

Negatives

• The activist stance implies dissatisfaction with the current corporate governance and strategic direction of Calumet, Inc.

Risks

• The Reporting Person may increase or decrease its position in the Issuer, which could create volatility in the stock price.
• Discussions with the Issuer's board and management regarding corporate governance and board composition may lead to disagreements or a proxy contest, potentially causing disruption.

Future Outlook

The Reporting Persons intend to review their investment in Calumet, Inc. on a continuing basis. Depending on various factors, they may engage in additional communications with management and the Board, discuss potential business combinations or dispositions, make recommendations concerning changes to capitalization, ownership structure, or Board structure (including composition), purchase additional shares, sell some or all of their shares, or engage in short selling or hedging transactions.

Management Comments

• The Reporting Persons purchased the Shares based on their belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity.
• The Reporting Persons intend to engage in discussions with the Issuer's board of directors and management team regarding a variety of matters relating to the Issuer, including enhancing the Issuer's corporate governance (including through potential changes to the composition of the Board).

Industry Context

This Schedule 13D filing indicates an activist investment in Calumet, Inc., a common occurrence in industries where investors perceive underperforming assets or governance issues. Such filings often signal an intent to unlock shareholder value through strategic or operational changes, which can be a catalyst for industry-wide discussions on best practices in corporate governance and capital allocation.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if the activist's initiatives lead to improved corporate governance, operational performance, or strategic changes. Conversely, prolonged disputes could create uncertainty.
• Management and Board: Will be subject to engagement and potential pressure from the activist investor regarding governance and strategic decisions.

Next Steps

• The Reporting Persons may endeavor to increase or decrease their position in Calumet, Inc. through open market or private transactions.
• The Reporting Persons intend to engage in discussions with Calumet, Inc.'s board of directors and management team regarding corporate governance and board composition.
• The Reporting Persons may engage in additional communications with management and the Board, and discussions with other stockholders or third parties about the Issuer and their investment.
• Potential future actions include making recommendations or proposals concerning changes to the Issuer's capitalization, ownership structure, Board structure, or suggestions for improving financial and/or operational performance.

Key Dates

Keywords

Calumet Inc., Schedule 13D, Activist Investor, Corporate Governance, Board Composition, Shareholder Activism, Undervalued Stock, Investment Opportunity, Wasserstein Debt Opportunities, Common Stock