Dillard's (DDS) Holder Barington Capital Urges Changes

In a 13D filing yesterday on Dillard's Inc. (NYSE: DDS), Barington Capital and related funds disclosed a 5.32% stake in the company and delivered a letter to the company requesting a number of measures to improve the Company's profitability and share price performance.

The changes recommended by Barington include:

(i) - initiatives to improve cost containment, inventory management and the Company's merchandising strategy, including those outlined in the January 29 Letter;

(ii) - measures to enhance the value of the Company's real estate portfolio, including the conversion of certain properties into higher and better uses, the closure of underperforming stores and the sale/leaseback of owned properties;

(iii) - a Board evaluation of (A) the Company's senior management team, to ensure that the Company has employed the best available executives to run the Company, and (B) the Company's executive compensation arrangements, to ensure that executive pay is appropriately aligned with the Company's financial performance; and

(iv) - measures to improve the Company’s record in the area of corporate governance, including, without limitation, the termination of the Company's A/B common stock class structure, amendment of the Company's majority voting standard to meet ISS/RiskMetrics Group standards, termination of the Company’s "poison pill" rights plan if not approved by the Company’s stockholders and separation of the Chairman and CEO positions

A Copy of the Letter:

January 29, 2008

The Board of Directors
Dillard’s, Inc.
1600 Cantrell Road
Little Rock, Arkansas 72201

To the Board of Directors of Dillard’s, Inc.:

As representatives of a group of stockholders that owns over 5.3% of the outstanding Class A Common Stock of Dillard’s, Inc., we believe that the vast value potential of the Company is not being realized. In our opinion, if the Company were more effectively managed it would be worth substantially more than its current stock price. Furthermore, Dillard’s sizable asset base provides the Company with a number of untapped options to create additional value for stockholders.

Given the Company’s poor share price performance over the past six months, we are convinced that Dillard’s is an undervalued asset with tremendous opportunity for improvement:

* Dillard’s $7.5 billion revenue base offers significant margin leverage capable of producing sizable cash flow gains from any future operating improvements. The Company’s geographic concentration, especially in high-growth areas of the Southeast and Southwest United States, offers unique regional opportunities for its 331-store portfolio. Furthermore, the Dillard’s brand name is well-regarded in the department store sector and the Company has received above average scores in the area of customer loyalty according to a recently released survey by Brand Keys.1 Clearly, Dillard’s has the scale and brand recognition to be a successful retailer.

* As Dillard’s trailing twelve month operating free cash flow margin2 is 2.4% versus 7.7% for its department store peer group,3 we believe that stockholders can realize enormous upside if margins can be improved to the levels achieved by the Company’s peers. We see a number of opportunities to immediately reduce the Company’s cost base, including by improving sourcing, rationalizing SG&A expenses and lowering capital expenditures. We also believe that there are a host of initiatives in inventory management and merchandising that can drive customer traffic and enhance margins. Among other things, we believe that Dillard’s needs to tighten its current assortment of offerings and vendors and consider a more regular promotional cadence, as its stores, in our opinion, are over-inventoried. In addition, we believe that Dillard’s needs to embark upon an aggressive re-merchandising effort that features new vendors (including exclusive offerings) and updated private label and in-house collections to differentiate its value proposition for customers. Furthermore, it is our belief that the Company needs to enhance its brand marketing by adding more image and lifestyle campaigns that communicate a revitalized message to the marketplace. We are convinced that each of these initiatives would add excitement and newness to the Dillard’s shopping experience and attract customers to its stores.

* Dillard’s owns approximately 75% of its store portfolio, comprised of approximately 42 million square feet of retail real estate. Currently, the Company’s shares trade at only 0.5x its tangible book value of approximately $32.50 per share. This represents a significant discount to the Company’s peer group, which trades at an average tangible book value multiple of approximately 2.0x.4 We also believe that Dillard’s tangible book value is understated, since the current market value of the Company’s owned real estate far exceeds its depreciated book value. In fact, in a November 26, 2007 research report, Deutsche Bank estimated Dillard’s net asset value before taxes to be $59 per share. Deutsche Bank also notes that “actions taken to unlock the Company’s real estate value would be positive for the shares, as the NAV [net asset value] for Dillard’s [is] greater than the value based solely on operating fundamentals.” It is our belief that there are a number of measures that the Company can take to enhance the value of its real estate portfolio, including converting certain properties to higher and better use, closing underperforming stores and engaging in sale/leaseback transactions.

As you know, Barington has attempted to reach out to you and William T. Dillard, II, the Company’s Chairman and Chief Executive Officer, several times over the past six months to discuss measures to improve shareholder value. Unfortunately, it appears to us that you have not only ignored our letters but have also done little to improve the Company on your own initiative, as Dillard’s financial results have gone from bad to worse since our initial communication in June 2007:

* Dillard’s monthly same store sales growth rate during the six-month period from July 2007 to December 2007 averaged (4.8)%, approximately 200 basis points worse than the same period the prior year.

* Dillard’s generated operating losses of $(24.5) million and $(6.5) million for the second and third quarters ended August 4, 2007 and November 3, 2007, respectively. The resulting average margin was (0.9)% – a 300 basis point drop in profitability from the same period last year. In contrast, Dillard’s peer group generated an average operating income margin of approximately 4.5% for the second and third quarters of 2007, which was roughly equivalent to the prior period.

* Dillard’s stock price has fallen by approximately 52% from June 30, 2007 through the close of trading on January 25, 2008, erasing more than $1.5 billion in shareholder value. The Company materially underperformed its peers during this time period, as measured by the S&P Retail Index, a leading benchmark for the industry, which fell by approximately 23% over the same period.

The disappointing financial performance of Dillard’s must be addressed. While we acknowledge that the market conditions in the department store sector have been challenging over the past few quarters due to concerns with a weakening U.S. economy, the magnitude of Dillard’s recent weak results cannot be attributed to the economy alone. Unfortunately, the past few quarters are but a continuation of Dillard’s history of chronic underperformance. As we have noted in prior correspondence, on average, Dillard’s same store sales growth rate has lagged its peer group by nearly 400 basis points per annum over the past five years. Furthermore, Dillard’s has not posted an increase in annual same store sales since 1999.

We note that the Company repurchased approximately 5.2 million shares (nearly 7% of the total shares outstanding) during the third quarter ended November 3, 2007 at an average price of $21.46 per share. The fact that the Company elected to repurchase such a large percentage of its shares indicates to us that management also believes that Dillard’s is significantly undervalued at its current stock price levels. While we believe the Company’s decision to repurchase a sizable amount of its shares is a positive step, it fails to address the myriad of other opportunities to create long-term value. Further measures, including those outlined in this letter, need to be taken.

Dillard’s can and must deliver considerably better financial and share price performance. As significant stockholders of the Company, we are committed to taking all actions necessary to enhance shareholder value.

Sincerely,

James A. Mitarotonda

Chairman and Chief Executive Officer

Barington Capital Group, L.P.

Michael A. Popson

Managing Director

Clinton Group, Inc.

Barington Capital Repeats Request To Meet With Dillard's (DDS) Management

In a new letter to Dillard's, Inc. (NYSE: DDS), Barington Capital repeated its request to meet with Mr. Dillard and members of his management team to discuss measures they believe will maximize shareholder value.

The letter was sent following Barington's receipt of a July 2007 letter from Mr. Dillard, in which Mr. Dillard did not consent to Barington's initial request to meet with him in order to present suggestions to improve the Company's profitability and better utilize its substantial asset base. Instead, Mr. Dillard stated that the Company's investor relations director "would be happy to speak with you regarding our corporate strategy and answer your questions."

A Copy of the Letter:

Dear Mr. Dillard:

Thank you for your letter. While we appreciate your offer to make Dillard's director of investor relations available to speak with us, our interest is to meet with you and members of your management team. As a steward of a publicly- traded company, we had expected that you would be receptive to meeting with one of your larger stockholders, especially one with substantial experience helping improve shareholder value as a long-term investor in a number of retail companies.

There is clearly room for improvement at Dillard's. As reported in Monday's New York Post, Dillard's "has historically lagged behind its peers by almost every retailing measure." Among other things, Dillard's suffers from sub-par operating margins(1) and sub-par same store sales growth(2) and trades at a valuation multiple that is considerably lower than the industry- average.(3) Furthermore, as noted in the July 15, 2007 research report of UBS Securities, the Company's Return on Invested Capital (ROIC) has been approximately 2 percentage points below its weighted average cost of capital. According to UBS, this is one of the main reasons the Company has typically traded at a lower multiple than its peers and implies that Dillard's is destroying value in its business.

While we strongly believe in the potential prospects of Dillard's, whose shares we believe are significantly undervalued, we hope you recognize that the status quo is not acceptable. We would therefore like to meet with you to discuss initiatives in areas such as inventory management, merchandising and cost containment that we believe the Company should implement to bridge these differences and substantially increase shareholder value. We would also like to discuss with you a number of measures to enhance the value of Dillard's real estate portfolio, including the conversion of certain properties into higher and better uses, the closure of unprofitable stores and the sale/leaseback of owned properties. Given the highly competitive nature of the retail industry, it is our belief that Dillard's needs to take advantage of every opportunity to improve its operations and realize its vast value potential.

As part owners of the Company and in light of our track record, we hope that you will reconsider our request. We would be happy to meet at a time and location that is most convenient for you.

Sincerely,
James A. Mitarotonda

(1) Dillard's last twelve month earnings before interest, taxes, depreciation, amortization and rent ("EBITDAR") margin is 9.0% versus the industry average of 13.2%. Industry group comprised of Bon Ton Stores Inc., Macy's, Inc., J.C. Penney Company, Inc., Nordstrom Inc., Kohl's Corp., Saks Inc., Stage Stores Inc. and Gottschalks Inc.

(2) On average, Dillard's same store sales growth has lagged its competitors by 3.9 percentage points per annum over the past 5 years. Dillard's has not posted an increase in annual same store sales since 1999.

(3) Dillard's Adjusted Enterprise Value / EBITDAR is 5.6x versus the industry average of 8.0x. Enterprise Value has been adjusted by capitalizing rent expense at 8x.

Barington Capital Demands Books and Records from Lancaster Colony (LANC)

In an amended 13D filing this morning on Lancaster Colony Corp. (Nasdaq: LANC), large holder Barington Capital said they delivered a letter to the Company demanding copies of certain books, records of account and minutes of proceedings of the Company in order to enable Barington to ascertain the value of its interest in the Company and to secure information as to the details of the Company's business and the status of its affairs and to investigate whether there are any deficiencies or improprieties in the management and operations of the Company or with the oversight provided by the Board of Directors of the Company.

Barington Capital Discloses 3.2% Stake in Dillard's (DDS); Requests Meeting with Management

Barington Capital Group discloses a 3.2% stake in Dillard's, Inc. (NYSE: DDS) and a letter to the CEO requesting a meeting with Mr. Dillard and members of his management team to discuss measures which Barington believes will maximize shareholder value for the benefit of all of the Company's stockholders.




A Copy of the Letter:



" Barington Capital Group, L.P. represents a group of investors that owns over 3.2% of the outstanding common stock of Dillard's, Inc. We have invested in Dillard\'s, whose shares we believe are undervalued, as we are convinced that we can assist the Company in dramatically improving shareholder value.

As we have not been able to reach you by telephone, we are writing to request to meet with you and members of your management team. We would like to discuss a number of measures that we believe will increase the Company's profitability to levels achieved by its peers and better utilize the Company's substantial asset base. These include initiatives that would augment the Company's existing operating strategy in areas such as merchandising, inventory management and cost containment, as well as measures to unlock the value of the Company's real estate portfolio.

We have substantial experience helping improve shareholder value as an investor in a number of retail, apparel and footwear companies including Syms, Warnaco, Pep Boys, Stride Rite, Steven Madden, Payless ShoeSource, Nautica and Maxwell Shoe. We hope that we can work together with you to maximize shareholder value at Dillard's."

Large Lancaster Colony (LANC) Holder Barington Criticizes CEO Gerlach

In an amended 13D filing on Lancaster Colony Corp. (Nasdaq: LANC), large shareholder Barington discloses a letter to the Board of Directors criticizing the Company's Chairman/CEO/President John B. Gerlach.

In the letter, Barington said Gerlach has failed to implement any of their recommended changes and continues to run the company as if it was a privately-owned family business, versus a publicly-traded corporation. Barington also criticizes the takeover defenses.

The firm calls on the board to make meaningful improvements to their corporate governance and return the company to historical levels of profitability and share price performance.

A Copy of the Letter:

To the Board of Directors of Lancaster Colony Corporation:

We have been disappointed with the profitability and share price performance of Lancaster Colony Corporation under the leadership of John B. Gerlach, Jr., the Company's Chairman of the Board, Chief Executive Officer and President. We have therefore suggested to him a number of measures that we believe will create significant value for the benefit of the Company's public shareholders.

The continued under performance of the Company since we initially proposed these measures over 14 months ago has compelled us to reach out to you - given your fiduciary duty to all Lancaster shareholders - as we question whether Mr.Gerlach will ever make any substantive changes to the company he runs and his family effectively controls.

While the Gerlach family founded Lancaster Colony Corporation and is the Company's largest shareholder, Lancaster is a publicly-traded corporation, not a privately-owned family business. Unfortunately, it seems as if the Company is being run as if it was.

Mr. Gerlach is not only the Company's Chief Executive Officer, he has also been appointed Chairman of the Board, the governing body responsible for selecting and overseeing the performance of the CEO. This was done without even the designation of a permanent lead independent director as a countervailing measure.

Even more concerning, however, is the Company's veritable fortress of anti-takeover defenses. These defenses include a staggered board of directors, a"poison pill" rights plan with a 15% trigger that was adopted without shareholder approval, "blank check" preferred stock and the ability of the Board to add directors without shareholder approval. In addition, the Company's articles of incorporation deny shareholders the right to cumulate their votes in the election of directors and require that shareholders obtain Board or shareholder approval prior to acquiring 20%, 33% and 50% ownership thresholds inthe Company, despite the existence of the Company's "poison pill" rights plan.Furthermore, the Company has an 80% super majority vote requirement to approve certain business combinations and amend various provisions in the Company's articles of incorporation and regulations, effectively giving the Gerlachs, wh ohold approximately 26% of the Company's common stock, a blocking position. All these defenses are in addition to the business combination, fair price, disgorgement and other provisions that protect Lancaster and all other corporations organized in the State of Ohio.

We believe that the numerous defenses the Company has in place are excessive(1)and demonstrate a disregard for the interests of Lancaster's public shareholders by facilitating the entrenchment of the Company's directors and executive officers and minimizing the influence that shareholders (other than the Gerlachs) have on the Board. In our opinion this is not only inappropriate, but likely damaging to shareholder value as many studies have demonstrated that companies that have good corporate governance in these areas tend to outperform those that do not.(2)

It is our hope that, upon reflection, you will concur that the Company's financial performance and corporate governance record is unacceptable and seet hat meaningful improvements are promptly made so that Lancaster not only becomes a leader in the area of corporate governance, but also returns to historical levels of profitability and share price performance.

Sincerely,
James A. Mitarotonda
Footnotes:

(1) Institutional Shareholder Services ("ISS"), a leading provider of corporate governance and proxy voting services, currently rates the Company's takeover defenses with a score of 1 out of 5, indicating that the Company's corporate governance practices in this area are in the bottom quintile relative to the Company's peers as identified by ISS. Overall, 73% of the companies in the Standard & Poor's 400 Index outperform the Company in the area of corporate governance according to ISS's most recent index ranking of the Company.

(2) See, e.g., Bebchuk, Cohen and Ferrell, What Matters in Corporate Governance?, Harvard Law School John M. Olin Center for Law, Economics and Business Discussion Paper No. 491 (September 2004)(identifying a statistically significant correlation between stock performance and the degree to which boards are accountable to their shareholders); Institutional Shareholder Services,Better Corporate Governance Results in Higher Profit and Lower Risk(2005)("Companies with better corporate governance have lower risk better profitability and higher valuation. More specifically, these well-run companies outperform poorly governed firms in return on investment, annual dividend yield,net profit margin, and price-to-earnings ratio."). See also Eisenhofer and Levin, Investment Returns: Does Corporate Governance Matter to Investment Returns?, Corporate Accountability Report, Vol. 3, No. 57 (September 23,2005)("[E]mpirical evidence suggests what common sense tells us is correct -those corporate boards that are more concerned about shareholder rights are also better guardians of shareholder money").

Barington Capital Discloses 5.2% Stake in Lancaster Colony (LANC), Request Divestitures and $300M Buyback

In a 13D filing on Lancaster Colony Corp. (Nasdaq: LANC), Barington Capital and related parties disclosed a 5.2% stake in the company. The firm also said the company should implement a number of measures to improve profitability and share price performance.

The measures the firm recommended include: 1. the divestiture of the Company's Automotive segment and Glassware and Candles segment; 2. reduction in corporate level expenses resulting from Lancaster Colony's "holding-company" structure; 3. implementation of initiatives to return the Specialty Foods segment to historical levels of profitability with an operating income margin of at least 20%; and a debt-financed self-tender offer to repurchase at least $300 million of the Company's outstanding common stock.

Barington Suggests Spin-Off or Sale of Griffon (GFF) Telephonics Subsidiary and Buyback

In an amended 13D filing on Griffon Corporation (NYSE: GFF), 5.24% holder Barington Capital disclosed a letter sent to the company's Chairman and CEO Harvey R. Blau outlining a number of measures that Barington believes will improve shareholder value for the benefit of all of the Company's stockholders. Barington said it sent the letter because Mr. Blau has not returned their phone calls.

In the letter the firm said, "We believe that Griffon's current stock price does not reflect the intrinsic value of the Company's operating divisions. In particular, it is our belief that the market has been undervaluing the Company's Telephonics subsidiary as well as what we view to be Griffon's core businesses - Garage Doors and Specialty Plastic Films."

Barington said, "we believe that the Company's Telephonics subsidiary should be valued at 9-12 times its Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), or approximately $400 - $550 million." Barington suggested a initial public offering, a tax-free spin-off or an outright sale ofthe subsidiary.

Barington also encouraged the Company to incur additional indebtedness and use the proceeds to repurchase stock, saying the company is under leveraged. The company said with debt and excess cash they could repurchase 15-20% of the Company's outstanding shares.

Barington also recommended cost reduction initiatives, divestiture of installation services and improved corporate governance.

A Copy of the Letter:

Dear Mr. Blau:

As you know, Barington Companies Equity Partners, L.P. and certain of its affiliates currently own over 5% of the outstanding common stock of Griffon Corporation.

We believe that Griffon's current stock price does not reflect the intrinsic value of the Company's operating divisions. In particular, it is our belief that the market has been undervaluing the Company's Telephonics subsidiary as well as what we view to be Griffon's core businesses - Garage Doors and Specialty Plastic Films.

As I am sure you are aware, Griffon's shares have been range-bound during the Company's last three calendar years (trading between approximately $18.50 and$28.50 per share) despite the strong performance of the stock market during this time period. For example, while the Russell 2000 Index increased 44.5% from January 1, 2004 through the close of trading on Wednesday, March 14, 2007, Griffon's stock price rose by only 18.2%(1).

As we disclosed in our Schedule 13D filing made last month, we are interested in discussing with you a number of measures that we believe will improve shareholder value for the benefit of all Griffon stockholders. We have therefore been disappointed that you have not returned our telephone calls to you seeking to schedule a mutually convenient time to discuss these measures in detail, which we have summarized for you below.

Unlock the Value of Telephonics

Based upon our analysis of publicly traded defense electronics companies as well as recent M&A activity in the industry, we believe that the Company's Telephonics subsidiary should be valued at 9-12 times its Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), or approximately $400 -$550 million. Unfortunately, the market has not given the Company full credit for the value of this business, currently valuing Griffon as a whole at anEV/EBITDA multiple of approximately 7.0x.

According to public statements by Griffon's management team, it appears that the Company recognizes this disconnect. For example, during the Company's August 3,2006 earnings call, management responded to a question about Telephonics by saying:

"... are we getting full value for it from a public perspective? Probably not."

It is our hope that you will take action to address the "conglomerate discount"that is impacting this business. It is our recommendation that the Company pursue an initial public offering, a tax-free spin-off or an outright sale of the subsidiary so that the Company and its stockholders can more fully realize the value of Telephonics.

Increase Share Repurchases

While the Company has a history of repurchasing its common stock, in light of the current trading range of the Company's shares, we believe that now is the time for the Company to be aggressively repurchasing its stock.

We encourage the Company to incur additional indebtedness and use the proceeds to repurchase stock, similar to the $50 million repurchase of shares that the Company consummated in July 2003 in connection with the issuance of $130 million of 4% Contingent Convertible Subordinated Notes due 2023. With a Net Debt/Trailing Twelve Months EBITDA multiple of approximately 1.4x, we believe that the Company is under leveraged. This is even more pronounced if one believes that the 4% EBIT margin realized in Specialty Plastic Films in Fiscal 2006 can improve and that the Garage Door segment can return to historical levels of growth and profitability.

If the Company increases its leverage to what we view to be a more reasonable level (a Net Debt/TTM EBITDA multiple of approximately 2.5x), we believe that it could raise approximately $110 million in new indebtedness. It is our belief that such debt, along with approximately $20 million of excess cash, would be sufficient to repurchase 15-20% of the Company's outstanding shares. Our analysis indicates that such a buyback (at a meaningful premium to the Company's recent stock price) would be accretive to the Company's earnings per share.

Pursue Cost Reduction Initiatives

While we applaud the reduction of the Specialty Plastic Films' workforce in Fiscal 2006 that is expected to result in approximately $5 million of annual cost savings, we believe that further reductions in the Company's cost structure are necessary. Given that Garage Doors has recently experienced pressure on both revenues and earnings, we believe that the Company should particularly focus on reducing expenses in this business.

Divest Installation Services

While Griffon's main operating divisions are primarily composed of higher market share, higher margin businesses, the Company's Installation Services business is an exception, with lower margins and market share than those enjoyed by most of the Company's other operating divisions. Furthermore, as the performance of this business is tied to new residential construction, it is exposed to the volatility of the housing markets. Given that this segment represents only 8.8%of Griffon's 2006 Operating Income (before unallocated amounts), we believe that the Installation Services Business should be divested.

Improve Corporate Governance

It is our belief that the Company needs to improve its corporate governance in a number of areas, including by declassifying the Company's Board of Directors and separating the Chairman and CEO positions. It is our recommendation that the Company seriously consider these and other initiatives to improve its record in this area.

Barington has a long track record of successfully working with the management teams and boards of directors of publicly traded companies to develop plans to create or improve shareholder value. As a stockholder in the Company since April2005, we strongly believe in the long-term value of Griffon's core businesses and hope that we can work together to improve the Company's profitability and share price performance. To that end, we reiterate our desire to meet with you and your management team, as well as independent members of the Company's Board of Directors, to discuss our suggestions in further detail.

We look forward to hearing from you.

Sincerely,
James A. Mitarotonda

Barington Capital Enters Confidentiality Agreement with Lone Star Steakhouse (STAR)

In an amended 13D filing on Lone Star Steakhouse & Saloon, Inc. (Nasdaq: STAR), large holder Barington Capital disclosed they entered into a confidentiality agreement with the Company permitting them to obtain certain confidential or non-public information in order to evaluate its position related to the new $27.35 per share offer from Lone Star Funds. The offer was recently raised from $27.10.

Barington Capital and other dissident shareholders have opposed the merger since it was announced. In the past, Barington said it has identified five parties that may be interested in purchasing the Company at a price higher than $27.10 per share if they are given the opportunity to review the Company’s non-public information.

Recently, Lone Star adjourned the meeting of shareholders to vote on the proposed merger from November 30th to December 12.

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Lone Star Steakhouse (STAR) Receives Slightly Increased Offer

After the close yesterday, Lone Star Steakhouse & Saloon, Inc. (Nasdaq: STAR) said its previously announced merger agreement with affiliates of Lone Star Funds, a Dallas-based private equity firm, has been increased from $27.10 to $27.35 per share.

The Company also said it pushed off the meeting of shareholders to vote on the proposed merger from November 30th to December 12.

Based on the original offer, a number of dissident shareholders said that they planned to vote against the deal, saying the price undervalued the restaurant chain. Those investors include Barington Capital, Deutsche Bank and Millenco LP. None of the opposing shareholders have yet to comment on the new offer.

In a recent letter to the company, one of those firms, Barington Capital said it has identified five parties that may be interested in purchasing the Company at a price higher than $27.10 per share if they are given the opportunity to review the Company’s non-public information without the requirement of having to first submit an acquisition proposal.

Barington Capital Raises Stake in Pep Boys (PBY)

In an amended 13D filing after the close on Pep Boys (NYSE: PBY), Barington Capital/James Mitarotonda disclosed a 8.1% (4.4 million shares) in the company. The fund said, "Since October 2, 2006 Barington Companies Equity Partners, L.P., Barington Companies Offshore Fund, Ltd., Barington Investments L.P. and RJG Capital Partners, L.P. purchased an aggregate of 545,900 shares of Common Stock."

Yesterday, Pirate Capital disclosed it raised its stake in Pep Boys to 11.7%.

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Lone Star (STAR)/Barington Capital Fight Wages On Ahead of Shareholder Vote on Merger

With just two weeks to go before shareholders vote on the $27.10 per share acquisition of Lone Star Steakhouse (Nasdaq: STAR) by private equity firm Lone Star Funds, dissident shareholder Barington Capital and the company continue to fight.

In an letter made public in an amended 13D filing on Thursday, Barington Capital said a financial advisor they engaged, Compass Advisers, has identified five parties that may be interested in purchasing the Company at a price higher than $27.10 per share if they are given the opportunity to review the Company’s non-public information without the requirement of having to first submit an acquisition proposal.

In a response to the the letter, Lone Star Steakhouse said they found the claims made by the firm "disingenuous and oddly timed". The company said a potential buyer does not have to submit a binding offer, making it easier than many comparable transactions. The company questioned if the "allegedly interested parties" were truly serious about a transaction.

In response to the response, Barington Capital reiterated their stance that the company was not maximizing value under the current merger agreement and said they will vote against the merger.