The Brink’s Company
(NYSE: BCO) must have some value after it managed to attract yet
another high profile activist investor. Warren Lichtenstein’s Steel
Partners, well-known for its relatively quiet activist involvement,
disclosed a 6.2% stake in Brink’s along with a letter to the Board of
Directors. Lichtenstein announced that he would be supporting the proxy
contest of fellow activist Clay Lifflander’s MMI Investments and urged
the company to complete a tax-free spin-off of one of its two business
segments. Combined, the two activists hold a 14.6% stake in the
armored-car transport company.
“We continue to believe Brinks is significantly undervalued and are
disappointed that it has not implemented strategic alternatives
recommended by us and the Company’s other significant shareholders,”
said Lichtenstein in the letter. “We do not believe Brinks’ current
strategy is in the best interests of the shareholders and cannot accept
the status quo.”
Brink’s recently announced that it has retained the Monitor Group to
assist it in the review of strategic alternatives, but the activist
shareholders believe that this may be mostly for show. After all, they
have been fighting with the company to take action ever since Pirate
Capital’s first investment a few years back without success. Now,
Pirate Capital has given up and Steel Partners has stepped in its place.
Steel Partners recommended that Brink’s first explore a tax-free
spin-off of one of its two business segments in order to unlock value.
In the event that this is not consummated, Lichtenstein urged the
company put itself up for sale in a process that maximizes value for
all shareholders. And in the meantime – due to the steep undervaluation
of the common stock – the activist recommended that the company up its
current $100 million share buyback program to $500 million.
Overall, this is great news for BCO shareholders as it could mean
that the company’s stock could finally see some substantial
appreciation. However, it is important to remain prudent as we have
already seen several attempts to unlock value fail with this company.
Ultimately, the success of this campaign will hinge on the upcoming
proxy contest. Combined, these factors make BCO a stock worth watching!
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