When Pirate Capital’s Thomas Hudson gets a response he doesn’t like, he’s neither shy nor slow about firing back.
Just a day after receiving what he deemed an inadequate response to his demands for an investment bank to explore a possible sale of uniform and linen provider Angelica Corp. from that firm’s CEO, Stephen O’Hara, Hudson faxed over his reaction: “We see the response as every bit as opaque as the company’s purported strategy for moving forward.”
Of course, O’Hara made no attempt to mollify the activist hedge fund manager, telling Norwalk, Conn.-based Pirate that Angelica has extended its contract with investment bank Morgan Joseph for another year, and warning Hudson that if he persists in proffering a proxy proposal to engage an investment bank, he will seek permission to exclude it from the proxy statement, “on the ground that the company has already implemented the proposal.”
Hudson, as you might imagine, sees things quite differently.
“Morgan Joseph has apparently been involved with the company almost 17 months, and it is not apparent to us that this engagement has done the company any good, and further not apparent that the engagement has moved the company any closer to a sale,” Hudson wrote in his letter, dated today. “So why extend the engagement, and muddle the firm’s mandate with whatever else the firm has been doing for the company over the last 17 months?”
“It is evident to us that the board doesn’t understand what we believe Angelica shareholders want,” he added. “We don’t believe that shareholders want the same old investment banking firm to do more analysis, but to recommend action that will in fact maximize shareholder value, such as the sale of the company.”
Pirate holds a roughly 9.8% stake in Chesterfield, Mo.-based Angelica.
Hudson added that, in the absence of “satisfactory action by the board,” he will nominate candidates to the company’s board at its annual meeting later this year.