Hedge fund managed by billionaire buys 5 percent of YRC Worldwide

A multibillion-dollar hedge fund managed by one of the country's richest men has bought 5 percent of YRC Worldwide Inc., according to a regulatory filing.
Affiliates of Tontine Associates, led by Jeffrey Gendell, now own 2.97 million shares of YRC common stock, or 5.2 percent of the Overland Park-based trucking giant.

The Tontine filing did not disclose the amount spent for the stock. However, the document said the event occurred Aug. 1, when YRC closed at $16.26 a share. A purchase of all the shares by Tontine Capital at that closing price would equal more than $48 million.

"Gendell's specialty is picking a macro-styled theme, buying very large positions in companies that benefit from that theme, and then working with or pressuring management to improve shareholder returns," according to Stockpickr.com.

Gendell is described in various publications as a low-profile billionaire who started the fund in 1997, posting spectacular returns and becoming among the country's richest people in Forbes magazine's annual listing.

Gendell's position was disclosed in a filing earlier this month with the Securities and Exchange Commission. His Greenwich, Conn., office did not return a call seeking comment Thursday.

A call to a YRC spokeswoman Thursday was not returned.

Gendell is best known for buying homebuilders in 2003 and steel companies in 2005. According to Thomson Financial, he has a history of investing in "struggling firms with recent woes, or unglamorous firms that are ignored by the majority of investors as long as their prices are appropriately depressed."

YRC seems to be a fit for Gendell's type of investing, given the transportation company's troubles since early 2007.

The company was hit early by the headwinds that slowed the U.S. economy. Losses mounted at the end of last year and early this year as YRC struggled to make its regional trucking firms operationally efficient and profitable.

YRC returned to profitability in the second quarter, but many analysts think the road back to solid financial footing remains a long one. YRC's stock traded as high as $46.60 in February 2007 and closed Thursday at $17.48 a share.

YRC also has had some high-profile turnover among senior executives, most recently losing the services of chief financial officer Stephen Bruffett, who took a job last week with a rival trucker. Bruffett was replaced on an interim basis by Paul Liljegren, YRC's corporate controller and chief accounting officer.

YRC chairman and chief executive officer Bill Zollars said the company would conduct an internal and external search for a successor to Bruffett.

"I don't think the investment community read it as a positive sign when a well-respected CFO decided to leave YRC," Jason Seidl, equity research director at Dahlman Rose & Co., said earlier this week.

Gendell also has made big investments recently in other struggling companies in the region. Earlier this year, he spent more than $11 million to acquire an 8.6 percent stake in Thermadyne Holdings Corp., a struggling producer of metal-cutting and welding equipment based in Chesterfield, Mo.

Gendell also bought more than 400,000 shares of TierOne Corp., a Lincoln, Neb., bank that has lost nearly $100 million in the past four quarters.

Gendell, among other things, is a donor to Duke University and a part-owner of the Cincinnati Reds baseball team.