Clinton Group Raises Stake in Optimal Group (OPMR), Sends Letter To Consider Certain Actions
In an amended 13D filing on Optimal Group, Inc. (NASDAQ: OPMR) after the close, Clinton Group disclosed a 7% stake (1.65 million shares) in the company, up from the 5.8% stake the firm disclosed in the original 13D filing in July. On August 14, 2006, Clinton Group sent a letter to the Company asking them to consider certain proposed actions.
The group said, "While we were disappointed with the recently announced quarterly results, we are encouraged by your shareholder friendly decision to engage a financial advisor." They also said, "one strategic option we have no interest in is a spin-off of FireOne by Optimal, which we believe would not be value enhancing and create concerns for U.S. holders regarding direct interest in the property. Therefore, we believe, subject to legal or regulatory constraints, immediately exploring options to repurchase the minority stake in FireOne would be prudent, regardless of the ultimate path chosen."
A Copy of the Letter:
August 14th, 2006
Neil S. Wechsler, Co-Chairman and Chief Executive Officer Optimal Group Inc.
3500 de Maisonneuve Blvd. W.
Suite 1700
Montreal, Quebec, Canada H3Z 3C1
Dear Mr. Wechsler:
We continue to believe Optimal is significantly undervalued, therefore, we haveadded in excess of 1% of Optimal's outstanding shares to our positionnecessitating an update to our original 13D filing.
While we were disappointed with the recently announced quarterly results, we areencouraged by your shareholder friendly decision to engage a financial advisor.
We have high regard for Genuity Capital Markets and hope they are activelyengaged in exploring the strategic alternatives previously enumerated in ourinitial filing.
To be clear, one strategic option we have no interest in is a spin-off ofFireOne by Optimal, which we believe would not be value enhancing and createconcerns for U.S. holders regarding direct interest in the property. Therefore,we believe, subject to legal or regulatory constraints, immediately exploringoptions to repurchase the minority stake in FireOne would be prudent, regardlessof the ultimate path chosen.
We believe a sum of the parts valuation, post repurchase of the FireOne minoritystake, offers Optimal investors significant upside that would be realizedthrough (i) the distribution of remaining excess cash, (ii) a strategic sale ofthe non-gaming assets, and (iii) a going-private transaction for FireOne.
Thank you in advance for your timely considering and reviewing these valueenhancing suggestions.
If you would like to discuss the above, you or your advisors are free to contactme at 212-377-4224.
Sincerely,
/s/ Conrad Bringsjord
Conrad Bringsjord
Portfolio Manager Event Driven and Activist Investments
Clinton Group Inc.
CC: Dan Daviau, Genuity Capital Markets
The group said, "While we were disappointed with the recently announced quarterly results, we are encouraged by your shareholder friendly decision to engage a financial advisor." They also said, "one strategic option we have no interest in is a spin-off of FireOne by Optimal, which we believe would not be value enhancing and create concerns for U.S. holders regarding direct interest in the property. Therefore, we believe, subject to legal or regulatory constraints, immediately exploring options to repurchase the minority stake in FireOne would be prudent, regardless of the ultimate path chosen."
A Copy of the Letter:
August 14th, 2006
Neil S. Wechsler, Co-Chairman and Chief Executive Officer Optimal Group Inc.
3500 de Maisonneuve Blvd. W.
Suite 1700
Montreal, Quebec, Canada H3Z 3C1
Dear Mr. Wechsler:
We continue to believe Optimal is significantly undervalued, therefore, we haveadded in excess of 1% of Optimal's outstanding shares to our positionnecessitating an update to our original 13D filing.
While we were disappointed with the recently announced quarterly results, we areencouraged by your shareholder friendly decision to engage a financial advisor.
We have high regard for Genuity Capital Markets and hope they are activelyengaged in exploring the strategic alternatives previously enumerated in ourinitial filing.
To be clear, one strategic option we have no interest in is a spin-off ofFireOne by Optimal, which we believe would not be value enhancing and createconcerns for U.S. holders regarding direct interest in the property. Therefore,we believe, subject to legal or regulatory constraints, immediately exploringoptions to repurchase the minority stake in FireOne would be prudent, regardlessof the ultimate path chosen.
We believe a sum of the parts valuation, post repurchase of the FireOne minoritystake, offers Optimal investors significant upside that would be realizedthrough (i) the distribution of remaining excess cash, (ii) a strategic sale ofthe non-gaming assets, and (iii) a going-private transaction for FireOne.
Thank you in advance for your timely considering and reviewing these valueenhancing suggestions.
If you would like to discuss the above, you or your advisors are free to contactme at 212-377-4224.
Sincerely,
/s/ Conrad Bringsjord
Conrad Bringsjord
Portfolio Manager Event Driven and Activist Investments
Clinton Group Inc.
CC: Dan Daviau, Genuity Capital Markets
posted by Lon at 10:24 AM
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