Pirate Says Brink’s Investors Favor Split

Aug 14 2007 | 8:34am ET

The Brink’s Company knows how to protect traveling valuables and it knows how to protect your home. But can it protect itself from angry shareholders?

Activist hedge fund Pirate Capital has stepped up its campaign to split Brink’s into separate home security and armored vehicle businesses, polling investors to determine that it is the preferred course of owners of almost half of the Richmond, Va.-based company’s outstanding shares.

According to the survey, conducted by D.F. King & Co. for Pirate, “at considerable expense” to the latter, investors representing 44.55% of Brink’s’ outstanding shares favor the split, and 60.37% want an examination of the option. The survey included Brink’s top 100 shareholders, and those surveyed represent more than 90% of the company’s outstanding shares.

As one might expect, Pirate founder Thomas Hudson was feeling his in a letter to Brink’s chairman and CEO Michael Dan. Referring to Dan throughout the missive as “Michael,” Hudson lambastes him for ignoring what Hudson sees as shareholders' will.

“While a sale of the company, as opposed to a tax-free split, could be more lucrative to you under your change in control agreement with Brink’s, potentially enriching you with millions of dollars, I believe this survey is conclusive as to the large shareholder preference for a split-up,” Hudson wrote in the letter, dated Aug. 7 and filed with the Securities and Exchange Commission on Friday. And he was just getting started.

“Maybe if you spent less time driving around in company cars, flying around in corporate aircraft, or golfing at the corporate golf course, and instead focused on listening to the owners of the company (the shareholders), you would be able to move the company strategically in the direction apparently favored by shareholders.”

Hudson demanded that Dan release the advisor analyses he claims the company has had prepared opposing a split, and obliquely warned that he will seek to unseat him at Brink’s’ 2008 annual meeting. Hudson accused Dan of suggesting he knows better than shareholders what’s right for the company, calling his attitude “insulting to all shareholders.”

“What are you afraid of Michael?” Hudson demands. “If you and/or the board have decided the company should maintain the status quo then I believe you have an obligation to the shareholders (owners) of Brink’s to tell them why.”

“These are not rhetorical questions Michael,” he added.

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