GenCorp Inc. (NYSE:GY) is taking fire from several activist hedge funds bent on unlocking value in the company’s shares. Pirate Capital, Carl Icahn, Steel Partners, and Sandell Asset Management have all taken stakes in the defense company and pushed for changes in order to unlock value for shareholders. This “who’s who” list of activist investors has many believing that changes may finally be implemented to help jump the company’s lackluster share price. So, should you look at picking up some shares of GenCorp?

Warren Lichtenstein’s Steel Partners has been a GenCorp shareholder for several years and first agitated for change in December of 2002. The activist hedge fund continued the assualt that culminated in a $700 million bid for the defense company in 2004. The company then issued new stock that effectively raised the takeover price by $127 million and Steel Partners withdrew its bid. Shortly after, Lichtenstein announced his first proxy contest that was eventually dropped when the company added a corporate governance expert to its board. Now, Steel Partners is renewing its push to unlock value by nominating a new slate of six directors that they believe can help unlock value.

Thomas Sandell’s Sandell Asset Management is another activist hedge fund that began its push for changes in March of 2005. The firm requested that the company make more changes to improve governance and also sell a chemicals unit. More recently, the hedge fund demanded that the company remove its anti-takeover measures and allow large shareholders to call special shareholder meetings. Clearly this would lend more credibility to the board, but would also open the door for hedge funds like Steel Partners to step in the door.

Thomas Hudson’s Pirate Capital was yet another activist involved with the company back in 2006 when it nominated its own directors to the company’s board of directors. The move was mollified when the company agreed to abandon its “poison pill” anti-takeover protection, but Pirate succeeded in winning three seats. Pirate noted that the company had substantial value tied up in its real estate that it believed should be unlocked through a strategic transaction. In particular, the hedge fund was interested in the company’s Sacremento real estate holdings.

In the end, there are a lot of activists circling around this stock. No doubt, Steel Partners is most interested in unlocking GenCorp’s real estate value while Sandell is bent on making governance changes and selling a chemical unit. Whether or not the hedge funds will succeed in getting their wishes remains to be seen, but this is definitely a stock that is worth watching over the next few months - with three activist involved, the odds of change are much higher!

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