Large Unisys (UIS) Holder MMI Investments Urges The Company To Explore Options for Government Business

In an amended 13D filing today on Unisys Corporation (NYSE: UIS), 9.9% holder MMI Investments urged the company to move immediately to hire a banker and review of all available strategic alternatives, with a particular focus on the potential realization of the U.S. Government business through a sale, tax-free spin-off or subsidiary IPO.
MMI said the company's restructuring benefits are not enough to correct Unisys' dramatic undervaluation. The said the undervaluation is in large part because of flaws in Unisys’ strategic configuration.

MMI requested a meaningful response from Unisys on or before January 23rd, or they will consider possible alternatives available to them, including with respect to the upcoming annual meeting of stockholders.
Unisys confirmed they received the letter from MMI and said they are is in the process of evaluating it.

A Copy of the Letter:

Dear Members of the Board:

MMI Investments, L.P. presently owns 34,787,000 shares of Unisys, or approximately 9.9% of the outstanding stock. As one of Unisys’ largest stockholders for more than a year, MMI has supported the company’s restructuring efforts, but felt tremendous frustration with the seemingly continuous stream of management, operational and financial missteps that have characterized recent performance, obscuring otherwise impressive growth in EBITDA as a result of the restructuring and undermining the significant intrinsic value of Unisys’ U.S. Government business (i.e., federal, state and local). Moreover we are mystified by management and the board’s inaction in the face of Unisys’ ruinous stock price performance over the past year. We believe Wall Street’s utter rejection of Unisys stock is indicative that the restructuring benefits are not enough to correct Unisys’ dramatic undervaluation. We believe that Unisys has serious flaws in its strategic configuration, which impair stockholder value due to the taint of the secularly declining Technology business and obscure market recognition of the highly-valuable U.S. Government business. Therefore we believe it is crucial that Unisys move immediately to announce the engagement of an independent, qualified investment bank to perform a review of all available strategic alternatives, with a particular focus on the potential realization of the U.S. Government business through a sale, tax-free spin-off or subsidiary IPO. This assignment should include undertaking the prompt execution of whichever transaction or transactions will lead to maximizing stockholder value. A review without follow through is of no help.
Management and the board have ignored several of our recommendations as to how Unisys can improve its perception by Wall Street and conform to the most basic expectations for a public company, including guidance issuance, increased segment transparency and a reverse stock-split (to avoid the perils of sub-$5 stock trading price, e.g. high volatility, institutional holder restrictions, etc.). There has been no shortage of similar constructive suggestions by Wall Street research analysts, other investors and qualified investment bankers. Meanwhile Unisys management has produced a cavalcade of small failures to dampen investor enthusiasm, such as the ongoing use of contract labor, the dramatic weakness in Consulting & Systems Integration and the recently botched refinance. We believe that these slip-ups, and the regularity thereof, have effectively decimated any investor enthusiasm for a restructuring that has impressively driven EBITDA from approximately $212 million (including retirement plan expenses) in 2005, to an estimated $523 million in 2007 and with expectations for $663 million in 2008 (even despite the delayed 8% to 10% operating margin targets).1 In short, you’ve thrown an earnings party and no one has attended.
We believe this undervaluation is in large part because of flaws in Unisys’ strategic configuration. The damage done to stockholder value by the drag of Technology and the failure to unlock the value of the U.S. Government business are significant and must be addressed. We believe that Unisys’ need to demonstrate a commitment to stockholder value is pressing, and the maximization of the value in the U.S. Government business provides the best opportunity for improving stockholder value in the immediate term (following which the severability of Technology can be addressed). The analysis included herein assumes that the separation of roughly $1.5 billion in U.S. Government revenue (with EBITDA assumed to be in-line with the margins of comparable companies) could result in a stock price of approximately $8 to $12 assuming the U.S. Government business trades in-line with its peer group multiples and the remaining Commercial business trades at the low-end of its peer group multiples.

In our view, the best alternative would be an initial public offering of 19% of the shares of a subsidiary of Unisys comprising all of its U.S. Government services business. This would allow for the highest multiple business to have its value recognized, raise equity capital for the company at an attractive price and provide employees of that unit with financial incentives as owners. Doing so would also preserve flexibility, including the ability to further monetize the business through the public market, sell the business with an M&A control premium or eventually complete a tax free spin off of the balance of the subsidiary shares to Unisys stockholders.

This analysis cannot quantify the significant additional operating benefits of such a transaction. We believe that the government contracting industry will continue to experience significant consolidation. Without a fairly-valued equity currency, and with the capital constraints of the rest of Unisys’ business, the U.S. Government business cannot be expected to participate as an acquirer and therefore risks falling behind its peers competitively. The undervaluation of all of Unisys’ businesses, but particularly U.S. Government, also impedes Unisys’ ability to compensate its employees through equity incentives – particularly given the recently-adopted policy to increase 401k matching contributions funded with Unisys stock. By continuing to ignore stockholder value, Unisys is literally jeopardizing its employees’ retirements.

We have expended significant time and effort considering these issues and attempting to convey their gravity to management and the board. We do not publicize our frustration lightly and understand that the board may have discussed various alternatives from time to time, and concluded that the restructuring was the first priority. However we believe the time for patient observation of the restructuring plan (which management’s public statements suggest is close to completion) and silent consideration of options has long passed. The time has come for significant action from this board. Your inaction is threatening to cause permanent value destruction at Unisys. We request a meaningful response on or before January 23rd. Otherwise we will be compelled to consider all possible alternatives available to us, including with respect to the upcoming annual meeting of stockholders.

Sincerely,
Clay Lifflander

Brinks (BCO) Holder MMI Wants To Assist In Strategic Review

In an amended 13D filing this morning on Brinks Co. (NYSE: BCO), 8.4% shareholder MMI Investments, L.P disclosed a letter to the company's consulting firm, Monitor Group, requesting to assist in the evaluation of the strategic options available to the company.

From the letter, "We read with interest the announcement of Monitor Group's retention by The Brink's Company "to assist in the ongoing evaluation of the various strategic options available to the company." During our more than four years as one of the largest owners of Brink's we have spent extensive time and effort scrutinizing Brink's chronic undervaluation and attempting to unlock the company’s significant intrinsic value through the encouragement of strategic alternatives. We believe Monitor Group would benefit from our experience and insights on these issues and would appreciate the opportunity to communicate with your team directly."

MMI To Nominates 4 To Brink’s (BCO) Board

MMI Investments, an 8.4% holder of Brink’s Company (NYSE: BCO), announced its four director nominees for election at the 2008 Annual Meeting.

Clay Lifflander, Portfolio Manager of MMI, said, "We are not seeking control of the board. We simply believe that the board as currently composed has demonstrated that it lacks the security industry perspective, strategic alternatives acumen and stockholder representation necessary to protect and maximize the value of Brink’s stockholders’ investment."

MMI’s nominees are:

John S. Dyson: Chairman of MCM Capital Management, LLC (the general partner of MMI Investments, L.P.) and Chairman of Millbrook Capital Management Inc.

Peter A. Michel: Mr. Michel is a recognized leader in the security services industry, and was formerly CEO of Brink’s residential security monitoring subsidiary, Brink's Home Security (BHS).

Robert J. Strang: Mr. Strang currently serves as the CEO of Investigative Management Group serving major financial institutions, Fortune 500 companies, large law firms and high net-worth individuals and families.

Carroll R. Wetzel, Jr.: Mr. Wetzel currently serves as a member of the board of directors of Exide Technologies (NASDAQ: XIDE), a manufacturer of batteries used in transportation, motive power, network power, and military applications.

Large Unisys (UIS) Holder MMI Investments Plans To Engage In Talks On Strategic Alternatives

In an amended 13D filing on Unisys Corporation (NYSE: UIS), 9.9% holder MMI Investments disclosed that they could acquire up to 14.9% of the stock and said they may engage in talks to regarding the undervaluation and potential strategic alternatives available to the company.

From the filing, "On November 5th the Reporting Persons determined that they and their representatives intend, at any time and from time to time, to engage in a proactive dialogue with members of the Board of Directors and management of the Issuer, as well as with other stockholders and other interested parties, regarding the undervaluation and strategic configuration of the Issuer, potential strategic alternatives available to the Issuer to increase stockholder value and other matters relating to the Reporting Persons' investment in the Common Stock of the Issuer, including, without limitation, the business, operations, governance, management, strategy and future plans of the Issuer."

New Trades From Top Activists

Here are a few intereting new trades put on from some of our favorite activist funds as disclosed in their lastest 13F filings (Qtr Ended 06/30/07). The stakes mentioned below are all under 5% so no 13Ds are required and the stakes are not nessecarly 'active', but we thought were interesting.

Williamn Ackman's Pershing Square Capital noted a new 10.3 million share stake in office product retailer Staples Inc. (Nasdaq: SPLS).

Jana Partners noted a new 6.5 million share stake in cable company Charter Communications Inc. (Nasdaq: CHTR), a new 725K share stake in broker Goldman Sachs (NYSE: GS), and a new 3 million share stake in rail service company Trinity Industries Inc. (NYSE: TRN).

Robert Chapman's Chapman Capital disclosed a a 460K shares stake in market research firm Harris Interactive Inc. (Nasdaq: HPOL).

Dan Loeb's ThirdPoint disclosed a new 9.65 million share stake in business software company BEA Systems Inc. (Nasdaq: BEAS), a 2.75 million share stake in REIT Douglas Emmett Inc (NYSE: DEI), and a 1.4 million in Veeco Instruments Inc. (Nasdaq: VECO). A full summary of Loeb's 13F is here.

Carl Icahn's Icahn Management's disclosed a new 2.4 million share stake in department store operator Macy's, Inc. (NYSE: M), a 3.5 million share stake in aluminum company Alcoa (NYSE: AA) and a 3.9 million share stake in packaged foods maker Kraft Foods Inc. (NYSE: KFT). A full summary of Icahn's 13F is here.

MMI Investments disclosed a small 138,300 share stake in utility National Fuel Gas Co. (NYSE: NFG)

Warren Lichtenstein's Steel Partners II disclosed a new 2 million share stake in home improvement retailer Home Depot (NYSE: HD), a 642K share stake in adult entertainment company Playboy Enterprises Inc. (NYSE: PLA), a 4.4 million share stake in oil driller Pride International Inc. (NYSE: PDE)

Atticus Capital disclosed a new 1.6 million share stake in heavy equipment maker Caterpillar Inc. (NYSE: CAT), a 2.1 million share stake in electric utililty Entergy Corp. (NYSE: ETR), and a new 4.6 million share stake in oil driller Transocean Inc. (NYSE: RIG).

Credit Squeeze Making Activists Back Off Merger Opposition

In an amended 13D filing on Acxiom Corp. (Nasdaq: ACXM), large holder MMI Investments said it has determined not to solicit proxies in opposition of the Proposed Merger of the company with Silver Lake and ValueAct Capital, for cash consideration of $27.10 per share. MMI said it has reassessed the Proposed Merger in view of the substantial and unanticipated deterioration in conditions within the equity and debt markets.

Acxiom is currently selling at $22.40, well below the $27.10 acquisition price.

MMI Investments said it reserves the right to pursue its nominations for election as directors at the Issuer's 2007 Annual Meeting of Shareholders if the Proposed Merger is not consummated.

William Ackman's Pershing Square Capital made a similar move related to his opposition of the takeover of Ceridian Corporation (NYSE: CEN) by Thomas H. Lee Partners, L.P. and Fidelity National Financial. On Friday, Pershing Square said it would support the deal citing concerns in the credit markets.

Ceridian is trading at $31.68, well below the deal price of $36.

Pershing Square said it would continue to pursue its previously announced proxy contest to replace the board, citing on-going concerns regarding credit and broader markets as well as the buyout group's walk-away right if it chooses to pay a $165 million break-up fee.

MMI Investments Files Under Hart Scott Rodino Antitrust Act To Boost Stake in Unisys (UIS) Above 10%

In an amended 13D filing after the close on Unisys Corp. (NYSE: UIS), 9.7% holder MMI Investments disclosed that on August 13th they filed under the Hart Scott Rodino Antitrust Improvements Act of 1976 to acquire more than 10% of the common stock. MMI said it does not plan to purchase more than 14.9% of the stock.

From the filing:

"In order to retain its flexibility to determine to increase MMI Investments’ holdings of Common Stock to more than 10% of the outstanding Common Stock of the Issuer, MMI Investments on August 13, 2007 notified the Issuer of its intention to file and filed a Notification and Report Form under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act") and request early termination of the waiting period pursuant to the HSR Act. Upon such filing, the filing of the Issuer’s responsive filing, and the expiration or early termination of the waiting period, the Reporting Persons would be permitted under the HSR Act to purchase additional shares of Common Stock such that the Reporting Persons could hold up to $500 million (subject to adjustment from time to time in accordance with the HSR Act, with the current threshold being $597.9 million) in total market value of Common Stock at the time of such purchase. However, MMI Investments does not currently intend to purchase Common Stock of the Issuer if, as a result of the purchase, it would own more than 14.9% of the outstanding Common Stock (which would have represented a market value of approximately $404 million based on the number of shares outstanding at June 30, 2007 and the closing price on August 13, 2007)."

MMI's Buyout Touch Continues with DJO

The buyout touch continues for MMI Investments. This morning, the firm's latest portfolio stock, DJO Incorporated (NYSE: DJO), agreed to be acquired by ReAble in a transaction valued at approximately $1.6 billion ($50.25/share).

5 of 7 of MMI's latest portflio stocks have now been acquired. The two that have not been acquired are Brink's Company (NYSE: BCO) and Unisys (NYSE: UIS). MMI has been pushing Brink's to spin-off one of its two business segments and the company is constantly a rumored takeover target. There has been no takeover news on Unisys.

MMI Investments Again Urges Brink's (BCO) To Pursue a Spin-Off

In an amended 13D filing on Brink's Company (NYSE: BCO) this morning, 8.3% holder MMI Investments disclosed a new letter to the Board of Directors presenting its views concerning the potential desirability of a spin-off of one of its two business segments.

MMI highlighted news last week that the company's competitor in security monitoring, Tyco, completed its long awaited spin-offs and, commenting on the high level of strategic activity in its industries said, "BCO has taken no action despite repeated demands from stockholders." MMI said, because of the company's non-action, "we fear that the public markets are passing BCO by."

Commenting on the potential value of Brink's in the event of a split-up, MMI said, "the aggregate value of achieving the business purposes of a tax-free split-up would be worth more than $79 per BCO share (an increase of 26% or more from today’s closing stock price), but also note that this updated analysis suggests our expectations may be unduly conservative."

NOTE: Recently we published an article highlighting MMI's 'Buyout Touch"

NOTE 2: Brink's is also an activist target of Pirate Capital, which was awarded a seat on the company's board.

A Copy of the Letter:

Dear Members of the Board,

Last week BCO’s largest competitor in security monitoring, Tyco, completed its long awaited spin-offs; in turn transforming itself into a virtual pureplay in security monitoring (with nearly 60% of its EBITDA derived from ADT and no more than 13% in any other business). The new Tyco currently trades at 10.2x calendar 2007 EBITDA (versus BCO at 6.6x). The Tyco spin follows the successful example of BCO’s largest European competitor, Securitas, which spun-off its own security monitoring business, Securitas Direct, late last year. Securitas Direct currently trades at 9.7x 2007 EBITDA. Since the Securitas Direct spin-off there have also been two major strategic acquisitions in the security monitoring space (HSM Electronic and IASG) and one in cash-in-transit (ATI), all at robust valuations.

In contrast to this high level of strategic activity in its industries, BCO has taken no action despite repeated demands from stockholders. More than six months have passed since MMI presented the Board with its review of BCO’s strategic alternatives to enhance stockholder value, and more than three months have passed since MMI refined that review to recommend a tax-free split-up of BCO as the best option. Our concerns now extend beyond maximizing BCO’s value – we fear that the public markets are passing BCO by, to the potential detriment of all its stakeholders.

For the Board’s benefit, we have enclosed herein updated analysis of a split-up of BCO’s two subsidiaries, which includes an expanded comparable public company universe at more robust multiples than in our March 30, 2007 presentation. We continue to believe that the aggregate value of achieving the business purposes of a tax-free split-up would be worth more than $79 per BCO share (an increase of 26% or more from today’s closing stock price), but also note that this updated analysis suggests our expectations may be unduly conservative. As always, we are at your disposal to discuss the enclosed analysis.

Sincerely,
Clay Lifflander

MMI Discloses 9.4% Stake in DJO - Is It Now a Buyout Target?

In a 13D filing on DJO Incorporated (NYSE: DJO), MMI Investments, L.P. disclosed a 9.4% stake (2.2 million shares) in the company. The firm did not show a stake in DJO at the quarter ended March 31, 2007.

The firm filed notification under the Hart Scott Rodino Antitrust Improvements Act to acquire 10% or more the company. The firm does not plans to raise its stake above 14.9%.

We recently published an article discussing how many of MMI Investments' portfolio stocks have been, or are in the process of being, acquired. Link to "The Buyout Touch" report

While it is likely a foolish strategy to bet on a buyout of DJO just because MMI holds a stake, the recent track record of the fund can not be ignored. Of their past 6 positions, excluding today's DJO disclosure, 4 have been acquired and one other is likely exploring that possibility.

From the filing: "In order to retain its flexibility to determine to increase MMI Investments’ holdings of Common Stock to more than 10% of the outstanding Common Stock of the Issuer, MMI Investments intends to notify the Issuer of its intention to file in the near future a Notification and Report Form under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act") and request early termination of the waiting period pursuant to the HSR Act. Upon such filing, the filing of the Issuer’s responsive filing, and the expiration or early termination of the waiting period, the Reporting Persons would be permitted under the HSR Act to purchase additional shares of Common Stock such that the Reporting Persons would hold up to $500 million (subject to adjustment from time to time in accordance with the HSR Act, with the current threshold being $597.9 million) in total market value of Common Stock at the time of such purchase. However, MMI Investments does not currently intend to purchase Common Stock of the Issuer if, as a result of the purchase, it would own more than 14.9% of the outstanding Common Stock (which would have represented a market value of approximately $137 million based on the number of shares outstanding at May 8, 2007 and the closing price on June 21, 2007)."

The Buyout Touch

You've heard of Genesis' song Invisible Touch, but have you heard of the Buyout Touch?

Here's how the song goes:

"MMI Investments seems to have a buyout touch - yeah. They take a stake, and you should take it to heart.

MMI Investments seems to have a buyout touch - yeah. They take control before a buyer looks to tear it apart."


Looking at MMI Investments' recent holding many have been acquired or are in the process of being acquired. These are not arbitrage plays, MMI owned the positions before the deals were announced.

Here is their current portfolio as of May 31, 2007.

Acxiom Corp (Nasdaq: ACXM): In May, the company agreed to be acquired by Silver Lake and ValueAct Capital for $27.10 per share. MMI Investments said they plan to vote against the deal, calling it too cheap.

Brinks Co (NYSE: BCO): The company is said to be considering strategic alternatives. MMI has pushed for a sale or other strategic alternatives. Another activist investor, Pirate Capital, which was also pushing for a sale, had its founder Tom Hudson added to Brink's board.

Dendrite Intl (Nasdaq: DRTE): Recently closed a transaction in which French company, Cegedim SA, acquired the company for $16 per share in cash.

Paxar (NYSE: PXR) Avery Dennison (NYSE: AVY) will acquire the company for $30.50 per share in a cash.

Unisys (NYSE: UIS): No merger deal or discussions. (YET!)

In the recent past, MMI also owned Andrx (Nasdaq: ADRX) which was acquired by Watson Pharmaceuticals (NYSE: WPI) for $25 per share.

MMI is run by Clay Lifflander. Prior to joining MMI, Lifflander served as President of the NYC Economic Development Corp under Mayor Rudolph Giuiliani and prior to that was Managing Director in the M&A Group at Smith Barney.

MMI Investments Plans to Vote Against the Acquisition of Acxiom (ACXM)

In an amended 13D filing on Acxiom Corp. (Nasdaq: ACXM), 8.2% holder MMI Investments, L.P. disclosed a letter to the Board of Directors expressing its intention to vote its shares in opposition to the Proposed Merger of the company with Silver Lake and ValueAct Capital, for cash consideration of $27.10 per share.

The firm said, "We do not believe this price represents fair value for our shares and note that it is: below what we believe to be a reasonable LBO valuation; significantly less than the price Acxiom would command were it valued at the mean multiple of LTM EBITDA in what we believe to be precedent transactions; and nearly 20% below the price Acxiom would command if it were valued at the LTM EBITDA multiple from ValueAct’s last offer for the company in 2005, prior to ValueAct’s joining the Acxiom Board."

A Copy of the Letter:

Dear Members of the Board:

MMI Investments L.P. is Acxiom’s second largest stockholder with approximately 8.2% of the outstanding stock. We have long been supportive of Acxiom’s operational and growth initiatives and believed our stock was significantly undervalued. We are therefore extremely disappointed by the Board’s decision to accept the $27.10 per share offer from ValueAct Capital and Silver Lake Partners. We are opposed to this deal as currently valued and intend to vote our shares in opposition for the following reasons:

We do not believe this price represents fair value for our shares and note that it is:

- below what we believe to be a reasonable LBO valuation;

- significantly less than the price Acxiom would command were it valued at the mean multiple of LTM EBITDA in what we believe to be precedent transactions;

- and nearly 20% below the price Acxiom would command if it were valued at the LTM EBITDA multiple from ValueAct’s last offer for the company in 2005, prior to ValueAct’s joining the Acxiom Board.

Our concerns about valuation are only amplified by our frustration with both the timing and structure of this transaction. Given the strategic initiatives currently underway (and recent earnings pain that your existing stockholders have had to bear) we struggle to understand why this is the right time to sell our company. Moreover it is our belief that the “go-shop” mechanism is a poor substitute for a full auction for a comprehensively marketed property. We can only hope that the “go-shop” for our company is a genuine one, with clear, concise, and thoughtful distribution of information, and thorough outreach to potential buyers from Acxiom’s industry, as well as those in comparable or tangential industries, and financial buyers (many of whom have significant experience and resources in the marketing data and informatics industry).

If any of the parties would like to discuss our views, we welcome the opportunity. Meanwhile unless or until a deal representing fair value for our shares emerges, we remain opposed to ValueAct Capital and Silver Lake Partners’ $27.10 per share offer and intend to vote our shares in opposition.

Sincerely,

Clay Lifflander

MMI Investments Raises Stake in Unisys (UIS) to 8.1%

In amended 13D filing on Unisys Corp. (NYSE: UIS) today, MMI Investments disclosed an 8.1% stake (27.96 million shares) in the company. This is up from the 7.1% stake (24.35 million shares) the firm disclosed in a past filing.

On average, the firm paid $6.90 per share for its stake. Today UIS is trading at $8.02.

Large Brinks (BCO) Holder MMI Investments Now Recomends Spin-Off

In an amended 13D filing after the close Friday on Brinks Co. (NYSE: BCO), 8.3% holder MMI Investments submitted a presentation recommending that the company consider a tax-free spin-off of one of its two business segments.

The firm said, "We believe a spin-off would achieve a number of significant corporate business purposes. As a result of achieving such business purposes, we believe the aggregate value of the two companies would be more than $79 per share, a 25% premium to yesterday’s closing price. This translates into more than $700 million of total market value."

NOTE: Brinks is also an activist target of Pirate Capital. Pirates' managing member Thomas R. Hudson was recently added to Brinks' Board of Directors.

A Copy of the Cover Letter:

Dear Members of the Board,

We remain frustrated with The Brink’s Company’s (“BCO”) longstanding, significant undervaluation relative to its peers. In December we presented an analysis illustrating four different strategic alternatives to attempt to address this chronic undervaluation. Since then BCO has announced no effort to address the situation and the stock has continued to languish, while two competitors have announced acquisitions and two others have proceeded down the path of separating security operations into independent, publicly-traded vehicles.

Accordingly, we have refined our thinking and are providing you our analysis calling for a tax free spin-off of one of BCO’s two business segments to shareholders on a pro rata basis as soon as possible. We have also enclosed herein a memorandum from our counsel regarding many of the pertinent issues and legal considerations arising in the spin-off process. We believe you will find, as we have, that these are eminently addressable with regard to a spin-off. We take at face value the company’s statements that they are always considering the best course to increase value. However, it is time to move from contemplation to action. We believe a spin-off would achieve a number of significant corporate business purposes. As a result of achieving such business purposes, we believe the aggregate value of the two companies would be more than $79 per share, a 25% premium to yesterday’s closing price. This translates into more than $700 million of total market value.

Please consider this promptly, and if you agree, put BCO on a path to realizing this opportunity as soon as possible. The window to capitalize on this option is open at this juncture and, as we stressed when we asked the company to sell BAX in 2005, such windows do not remain open forever. We believe the result would be two strong, viable public companies, each with market capitalizations of approximately $1.5 billion or greater. This corporate transaction is within the control of the Board to initiate and execute, but we believe you would have significant shareholder support behind you. As owners of 8.3% of the outstanding stock, we have been long been admirers of BCO’s management, operations, brands and market positions, and believe that this endeavor would ultimately result in those qualities being more fairly valued in the marketplace.

As always, we are amenable to discussing any of our points in the enclosed analysis.

Clay Lifflander

MMI Investments Raises Stake in Unisys (UIS) to 7.1%

In an amended 13D filing on Unisys Corporation (NYSE: UIS) after the close Friday, MMI Investments disclosed a 7.1% stake (24.35 million shares) in the company. This is up from the 21.66 million share stake the firm disclosed for the quarter ended February 14, 2007.

Pirate Capital Now Considering Nominatting Two More to Brink's (BCO) Board

In an amended 13D filing after the close on The Brink's Company (NYSE: BCO), 8.5% holder Pirate Capital, which has been pushing the company for a sale, said the company has not responded to its request that Thomas R. Hudson Jr. immediately be appointed to the company's Board of Directors other than to indicate that Mr. Hudson's nomination for election to the Board will be considered in due course.

Pirate is now contemplating proposing two additional nominees for election at the upcoming annual meeting.

Pirate's effort to have Brink's put on the auction block got a boost yesterday after another large holder, MMI Investments, said they also support a sale.

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Another Large Brink's (BCO) Shareholder Supports a Sale

In an amended 13D filing on The Brink's Company (NYSE: BCO) late Friday, 8.3% holder MMI Investments said it will supports Pirate Capital's proposal that the company immediately engage an investment banking firm to explore all strategic alternatives, including a possible sale.

MMI submitted a presentation which indicates that Brink's has many attractive, value-enhancing strategic options including an LBO, sale to a strategic acquiror, tax-free split-up of the company, leveraged recapitalization or another significant stock repurchase.

MMI Investments said Brink's potential value from following strategic alternatives is likely to be $70 or more per share.

MMI Investments said Brink's has multiple options, and more than one could be explored simultaneously which they believe makes the likelihood of success much greater.

A Copy of the Cover Letter Sent to the Company:

Dear Members of the Board,

MMI Investments, L.P. is the owner of 4,008,000 shares of The Brink’s Company (“BCO”) or approximately 8.3% of the outstanding stock. We believe BCO’s brands, financial performance, market positions and management are among the best in its industry. We therefore remain extremely frustrated with its continued undervaluation relative to its operating success, its peers’ trading multiples and the value it might achieve from pursuing one of several potential strategic alternatives.

Another large stockholder has raised the question of BCO pursuing a strategic alternatives review and indicated that it intends to submit a stockholder proposal to that effect at BCO’s 2007 annual meeting of stockholders. As we understand the proposal described in their Schedule 13D amendment, we are in support of it. The reasons for our support are reflected in our presentation transmitted for filing with the SEC today, a copy of which is enclosed herein, which indicates that BCO has many attractive, value-enhancing strategic options including an LBO, sale to a strategic acquiror, tax-free split-up of the company, leveraged recapitalization or another significant stock repurchase. Details underlying these analyses are included in the presentation materials, but in summary we believe that BCO’s potential value from following one of these strategic alternatives is likely to be $70 or more per share. Moreover, we believe that because BCO has multiple options, more than one could be explored simultaneously which we believe makes the likelihood of success much greater.

For the reasons described in the accompanying presentation materials, we believe that, as with the BAX sale process last year, BCO’s stockholders’ interests could best be served by a formal review of strategic alternatives by a qualified investment banker, whose mandate would include an active canvassing of potential buyers and the debt and equity markets. As discussed therein, BCO’s valuation and operations are complex subjects which require explanation and study to appreciate fully. We believe that several factors obscure the value that potentially could be achieved by pursuing strategic alternatives, such as the expected significant increase in 2007 (and beyond) EBITDA, the future transference of the cash burden of the legacy liabilities from the company’s operations to the VEBA assets (which we believe will shortly be overfunded if not utilized soon) and the aggressive growth of BHS which hinders cash flow generation. We believe that an active canvassing of the market is essential in order that interested parties properly appreciate these factors in estimating BCO’s true value.

Further, we believe that given the current strength of the mergers and acquisitions market (as evidenced yesterday in the robust price paid for HSM Electronic), as well as the equity and credit markets, that BCO would be well advised to pursue its alternatives in the beginning of 2007. A costly and time-consuming proxy contest with such stockholder during the first half of 2007 unnecessarily risks missing this window of opportunity.

As we note in our presentation, if management and the Board have a compelling argument in opposition to the analysis herein, we would welcome such a dialogue, as well as the opportunity to discuss this matter with the Board if they so desire. Please let us know.

Sincerely,

Clay Lifflander

Link to MMI's Presentation

MMI Investments Discloses 6% Stake in Unisys (UIS)

In a 13D filing this morning on Unisys Corporation (NYSE: UIS), MMI Investments disclosed a 6% stake (20.6 million shares) in the company.

In a standard disclosure, the firm said they made the purchase for investment purposes and may communicate with the Issuer's management, directors and other shareholders in the future. The firm said it has no current plan or proposal that relates to or would result in any of the transactions or other matters specified in clauses (a) through (j) of Item 4 of Schedule 13D.

The firm said the total purchase price of its 20,621,700 shares was $133,727,480.

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