Chapman Capital Discloses 8.9% Stake in Glenayre Technologies (GEMS), Demands Sale
In a 13D filing last Thursday on Glenayre Technologies, Inc. (Nasdaq: GEMS), Chapman Capital LLC disclosed a 8.9% stake (6.1 million shares) in the company and demanded a sale of the company.
Robert L. Chapman, Jr., Managing Member of Chapman Capital LLC, commented, "Chapman Capital demands that Glenayre Technologies, following the divestiture of Glenayre Messaging, conclude a full scale auction of the Company, including the exploration of EDC CEO Mr. James Caparro putting his own capital at risk via an acquisition proposal of his own."
From the Purpose of Transaction section of the filing:
"On August 14, 2006, Mr. Chapman engaged in a scheduled conference call with Mr. Clark H. Bailey and Mr. James Caparro, Chairman/CEO and CEO/President of the Issuer and Entertainment Distribution Company, LLC, respectively, regarding various operational and strategic matters related to the Issuer. Mr. Chapman vehemently advised that the Issuer (for the benefit of all of its owners) consummate a two-step strategic process before year-end 2006: 1) Belatedly divest its cash burning, enterprise diluting Glenayre Messaging business; and 2) rectify Mr. Caparro's egregiously irregular compensation arrangement by selling to Mr. Caparro (and reported former EDC buyout partner Apollo Advisors, L.P.) the residual EDC business via an acquisition of the Issuer in its entirety. Given the low-mid single digit EBITDA multiple implied for EDC, Chapman Capital believes that an acquisition price of the Issuer (sans Glenayre Messaging) at a significant premium is highly feasible.
During the August 14, 2006 conference call, Mr. Bailey made certain comments that have led Chapman Capital to launch a separate investigation that remains in its final stages. Chapman Capital expects to release to the public the results of both investigations in September 2006 as a part of an amendment to this Schedule 13D."
Robert L. Chapman, Jr., Managing Member of Chapman Capital LLC, commented, "Chapman Capital demands that Glenayre Technologies, following the divestiture of Glenayre Messaging, conclude a full scale auction of the Company, including the exploration of EDC CEO Mr. James Caparro putting his own capital at risk via an acquisition proposal of his own."
From the Purpose of Transaction section of the filing:
"On August 14, 2006, Mr. Chapman engaged in a scheduled conference call with Mr. Clark H. Bailey and Mr. James Caparro, Chairman/CEO and CEO/President of the Issuer and Entertainment Distribution Company, LLC, respectively, regarding various operational and strategic matters related to the Issuer. Mr. Chapman vehemently advised that the Issuer (for the benefit of all of its owners) consummate a two-step strategic process before year-end 2006: 1) Belatedly divest its cash burning, enterprise diluting Glenayre Messaging business; and 2) rectify Mr. Caparro's egregiously irregular compensation arrangement by selling to Mr. Caparro (and reported former EDC buyout partner Apollo Advisors, L.P.) the residual EDC business via an acquisition of the Issuer in its entirety. Given the low-mid single digit EBITDA multiple implied for EDC, Chapman Capital believes that an acquisition price of the Issuer (sans Glenayre Messaging) at a significant premium is highly feasible.
During the August 14, 2006 conference call, Mr. Bailey made certain comments that have led Chapman Capital to launch a separate investigation that remains in its final stages. Chapman Capital expects to release to the public the results of both investigations in September 2006 as a part of an amendment to this Schedule 13D."
posted by Lon at 11:05 AM
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