IKON Office Solutions
(NYSE:IKN) may face some problems with activist investor Warren
Lichtenstein's Steel Partners who believes the company's shares
continue to trade well below intrinsic value, according to a
Schedule 13D/A
filing with the SEC. Shareholders are hoping that the activist investor
can work to correct this gap in valuation and unlock value.
"As
you know, I believe that the IKON shares continue to trade at a
significant discount to their intrinsic value and I have made several
recommendations on ways to unlock the value of the shares, including by
way of a self tender or outright sale of the Company," said
Lichtenstein. "I was excited for the opportunity to explore with you in
further detail my recapitalization proposal in light of other strategic
alternatives you indicated are currently available to IKON."
IKON
recently backed down, however, by withdrawing its support for a
required confidentiality agreement to proceed with the plans. It is
uncertain as to whether this was due to some developments that
prevented them from entering into such an agreement or simply a
rejection of the hedge fund's proposals. Regardless, Steel Partners
fired back by nominating its own John Quicke to the board of directors
to head the exploration of strategic alternatives.
"As you know,
Steel Partners is one of IKON's largest shareholders and Steel's
position in the Company represents one of its largest investments in a
domestic public company," said Lichtenstein. "I would like to reiterate
that we are committed, long-term shareholders whose priority is to work
with the Board - not against it - in doing what is best for all
shareholders."
In the end, IKON is one of Steel Partner's
largest holdings and with 10.2% of the company under his control it is
likely that he will obtain a board seat. The success of this campaign
remains to be seen, but if he is able to obtain a seat it will likely
mean substantial returns for shareholders. This makes IKN a stock
worth watching!
Related Companies
Xerox Corporation (XRX)Pitney Bowes Inc. (PBI)
FedEx Corporation (FDX)