Twin Disc Shrugs Off Hedge Fund’s Demands

Sep 12 2007 | 1:09pm ET

Not for sale! Twin Disc, Inc. today rejected an earlier demand by activist investor Ephraim Fields of Clarus Capital Group Management that the firm put itself on the auction block. 

In an 8-K filing with the Securities and Exchange Commission, CEO of the heavy-duty power transmission equipment manufacturer Michael Batten said, “While we have implemented several of Mr. Fields’ suggestions, we disagree with his assessment that our stockholders would best be served through the sale of the Company, and our experience leads us to conclude that other positions advanced by Mr. Fields are also not in the best interests of our stockholders.”

Batten also noted that Fields’ suggestion that the company increase its debt load “would finance Mr. Fields’ proposal that the Company purchase additional shares of its stock – purchases that Mr. Fields previously suggested should come from significant shareholders such as Clarus Capital. Twin Disc has demonstrated its willingness to incur debt…But we do not believe that incurring debt in order to satisfy the short-term objectives of certain investors is consistent with the long-term best interests of the Company and its shareholders.”

For his part, Fields said in a SEC filing that the publicly traded company operates more like a privately held concern with a “highly illiquid stock” and “no analyst coverage” adding that its management “does not hold earnings calls and rarely visits investors or participates in conferences.”

“TWIN is an amazing company with bright prospects and a strong management team. We fail to understand why management wants to keep this a secret,” he said. 

Clarus Capital currently owns a 5.1% stake in the company.

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