Glenview Capital Discloses a Nearly 10% Stake in Omnicare (OCR)
ValueAct Capital, another activist fund, disclosed a 6.5% stake in Omnicare back in September.
Tracking the bold moves of activist investors
Although Baugur is currently actively exploring its options with respect to the Issuer, there can be no assurances that Baugur will seek to implement any one or more of the foregoing actions and Baugur expressly reserves the right to change its intentions with regard to the Issuer.
Depending on prevailing market, economic and other conditions, Baugur may from time to time acquire additional securities of the Issuer, convert or exchange securities that it holds, engage in discussions with the Issuer concerning further acquisitions of securities of the Issuer or otherwise invest in the Issuer or one or more of its subsidiaries. Baugur intends to review its investment in the Issuer on a continuing basis and, depending upon the price and availability of the Issuer’s securities, subsequent developments concerning the Issuer, the Issuer’s business and prospects, other investment and business opportunities available to Baugur, general stock market and economic conditions, tax considerations and other factors considered relevant, may decide at any time to increase or decrease the size of its investment in the Issuer or to sell any or all of the securities of the Issuer that it holds.
Other than as set forth above, none of Mr. Jón Ásgeir Jóhannesson, Baugur nor, to the best of its knowledge, any of Baugur’s executive officers or directors listed in Schedule A have any present plans or proposals that relate to or would result in any transaction, change or event specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Based on our conversations with shareholders that represent approximately 50% of outstanding shares of the Company, we believe that a return of excess capital at this time would be well received. While some of these shareholders may differ on a preferred method for returning capital (namely, special dividends vs. share repurchases), all agree that the current balance sheet is sub-optimal and is suppressing shareholder returns.
Over the last few months we have had multiple discussions with Company management about capital management. We were initially encouraged by management's comments on the April 27, 2007 conference call:
"...acquisition opportunities are the first, second and third agenda items in terms of capital deployment to maximize shareholder value. However, we are considering ways to make the balance sheet more efficient, given the pipeline of acquisition opportunities and the inefficiency of the balance sheet."
Three months later, on their July 27, 2007 conference call, management's tone and message changed:
"We believe it is prudent to maintain our current capital position. In addition, as Mark has just discussed, our cash needs for the business are fairly significant in '07. Given the current incremental usage of cash for a new business and our active acquisition review, we have decided at this point in time not to implement any capital deployment strategies this quarter but we will continue to review and assess this possibility on an ongoing basis as we have stated to you previously."
Given the Board's decision to take no action with respect to capital management, we requested on August 9th and again via a letter to the Board of Directors on September 18th, to meet with one or all of the independent Board members to share our analysis and thoughts. We have been disappointed by the Board's decision to not meet and engage with us in a discussion concerning this issue. Given the lack of response and what we believe is an ongoing risk factor and drag on the Company's valuation, we are left with no choice but to make our concerns public.
We again request a meeting with any or all of the independent Board members to discuss this important issue at Magellan.
-- Allow shareholders to call special meetings. The Board should amend CSX's bylaws to allow shareholders to call special meetings, a shareholder proposal that was approved overwhelmingly by shareholders at CSX's last annual meeting.
-- Align management compensation with shareholder interests. Michael Ward has been the highest compensated CEO in the rail industry over the past two years, despite CSX being operationally outperformed by its peers. TCI urges the Board to align management compensation with shareholder interests. This includes tying long-term compensation to returns on capital rather than to the operating ratio, which can be easily manipulated.
-- Present plan to improve operations. CSX is last or near last among the five major North American railroads on virtually every important operational and financial metric. CSX must present to shareholders a detailed operating plan with specific long-term operational and cost targets to address this under-performance. The existing operating ratio targets can be achieved with no operational improvements.
-- Justify 2007-2010 capital spending plan. TCI believes shareholder value is created through sustainable investment in maintenance, infrastructure and training. TCI is concerned that management's current illogical and undisciplined capital spending plan puts at risk CSX's ability to invest long-term because it undermines shareholder confidence and therefore access to capital.
-- Improve relations with labor, shippers and shareholders. TCI believes the Board and management have taken an unnecessarily adversarial approach to these key constituencies, resulting in strained relations instead of collaborative solutions. TCI believes the interests of the major stakeholders are largely aligned, and success is best achieved through open and constructive relations with them.
For further information and graphics included in the letter sent today to the Board of Directors of CSX, please visit www.strongerCSX.com.
Dabah intend to contact and discuss with potential private equity sponsors and strategic buyers the possible acquisition of the Company. The Reporting Persons have engaged Bear, Stearns & Co. Inc. as financial advisor.
Ezra Dabah is the former Chairman of the Board and Chief Executive Officer of the Company. He currently serves as a member of the Company's Board of Directors. Pursuant to mutual agreement with the Board of Directors, Mr. Dabah resigned from his position as Chief Executive Officer on September 24, 2007 and the Company appointed an Interim Chief Executive Officer.
From the filing:
"The Reporting Persons, as large, long-time and concerned stockholders of the Company, are considering their alternatives with respect to their investment in the Company and possible means to maximize shareholder value. The Reporting Persons are considering the possibility of making an offer, in combination with others, to acquire the Company and the available alternatives for financing an acquisition of the Company. The Reporting Persons intend to contact and discuss with potential private equity sponsors and strategic buyers the possible acquisition of the Company. The Reporting Persons have engaged Bear, Stearns & Co. Inc. ("Bear Stearns") to act as the Reporting Persons' financial advisor in connection with these efforts. The engagement of Bear Stearns and the Reporting Persons' efforts to evaluate a possible acquisition of the Company may also result in the Reporting Persons' support of a third party's proposal to acquire the Company. The Reporting Persons also intend to contact and discuss with other shareholders of the Company their respective views regarding their investment in the Company, the Company's prospects and possible strategies to maximize shareholder value. Such strategies could include, among other possibilities, a proxy solicitation to seek shareholder approval of proposals the Reporting Persons may make and/or elect directors to the Company's board of directors. Although the Reporting Persons are actively exploring their options with respect to the Company, there can be no assurance that the Reporting Persons will seek to implement any one or more of the foregoing."
Samson Holding is the largest Hong Kong-based furniture maker.
From the Filing:
"The Shares acquired by the Reporting Persons were viewed by the Reporting Persons as an attractive strategic investment in the Issuer. Samson Holding presented a proposal to the Issuer in July this year with respect to a possible business combination transaction, which the Issuer declined to pursue. The Issuer is a major customer of Samson Holding and in a business that is complementary to the Reporting Persons’ businesses and/or investments. The Reporting Persons intend to review their holdings in the Issuer on a continuing basis and, depending on the price and availability of the Issuer’s securities, subsequent developments affecting the Issuer, the business prospects of the Issuer, general stock market and economic conditions, tax considerations and other factors deemed relevant, may consider various alternative courses of action and take any action deemed appropriate, including, but not limited to, the acquisition or disposition of the Issuer’s securities through open market transactions, seeking to acquire control of the Issuer through privately negotiated transactions, tender offers, exchange offers, mergers or otherwise, seeking board representation, or making proposals to the Issuer or its shareholders. The Reporting Persons may attempt to enter into discussions with the Issuer’s management, directors or other shareholders with respect to any of the foregoing. As part of their ongoing review, the Reporting Persons have engaged and/or may in the future engage, legal and financial advisors to assist them in such review and in evaluating strategic alternatives that are or may become available with respect to their holdings in the Issuer. Except as set forth in this Statement, none of the Reporting Persons has any present plans or proposals that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D."