Pirate Capital: Activist Hedge Fund or Publicist Hedge Fund?

Pistol Pirate Bust.jpgPirate Capital has found a way to make news without losing money or staffers or getting investigated by the SEC. It’s getting back into the “activist investor” game again.
From 13D Tracker:

In an amended 13D filing on Brinks Co. (NYSE: BCO), 8.5% holder Pirate Capital disclosed a letter to the board of directors of the Issuer, among other things, encouraging the board to (i) take immediate steps to unlock long-term shareholder value by retaining an investment bank to explore the sale of the Company and initiate a large Dutch tender offer for the Shares, and (ii) immediately appoint Thomas R. Hudson Jr. to the board. The firm also recommended a substantial second Dutch tender offer for its stock.

But is this just empty saber-rattling? After the jump, take a look at the performance of Brinks stock for the last few years and see if you agree with Captain Tommy Hudson that the management of Brinks isn’t doing enough for shareholder value.
Pirate Capital Wants Brinks (BCO) Sale, Seat on Board [Street Insider: 13D Tracker]


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Comments (7)

  1. Posted by Scotty | November 21, 2006 at 3:42 PM

    If this is like every other fund out there, they do quarterly redemptions with 30 days notice, seems like someone is trying to show some activity on the boat so people don’t all abandon ship. Well I hope Tommy gave life preservers to the employees because the captain should always go down with his ship. How stupid to rattle for change at one of your best performing (of the few that are even performing) companies….great 13-F guys

  2. Posted by buccaneer | November 21, 2006 at 4:10 PM

    I am sure that never occured to Warren Lichtenstein at Steel, who is clearly the inspiration for the investment by Pirate.

  3. Posted by Cap'n Kirk | November 21, 2006 at 5:53 PM

    Blah blah blah. This is a no-brainer. Hudson is firing a broadside now so he doesn’t have to walk the plank later.

  4. Posted by value | November 22, 2006 at 10:52 AM

    I agree with Tom that the company is undervalued based on potential

  5. Posted by buccaneer | November 22, 2006 at 12:33 PM

    Well, if you mean by borrowing a couple billion and buying back shares, I suppose so. That type of activism, however, is mindless and the moment the hi-yield market stops funding such nonsense, Pirate will be amid another 25% drawdown..

  6. Posted by I am so mad | November 24, 2006 at 11:36 PM

    First My Marketing Team that Raised me all the money walked out on me leaving me with no way to interface with curent or potential investors… They claim I did not pay them well….hmph… so what if I did… its my firm so I will do what I want.. Mine Mine Mine… I even came up with an awesome idea to buy each marketing guy a car, worth no more than $100,000, on top of their measley bonuses if they got my firm to $3.5 billion. Like they had a chance anyway… hahahaha… anod now they all walked out anyway so I do not have to pay them crap. A car.. how hysterical is that!!! I mean really, in normal systems of fair and market compensation I would have had to pay them at least a million and a half to raise me the $2 billion it would take to get me to $3.5 billion. It was impossible to begin with.
    Then the analysts walk out on me and that ingrate Carlton Klein. That one is gonna hurt. How do I explain this one to my investors. I now I will say that they never really added any value anyway… it was all me I tell you. I will say that they were all just window dressing so that investors would think that I was building a business and working on producing future returns.. what they don’t know is that it was always my plan to have the sales guys raise me as much money as posible and then give them all crappy bonuses so that they would all walk out and I would then get to keep all the management fees and even the deferred portion of all of their bonuses… Brilliant I tell you> What brilliant idea.
    Well now I want my analysts to resign.. and have me put on all the boards in their places…. whatdo you mean I have to run a proxy contest. I did and that is why these guys are on your board and now that they don’t work for me I want them off. I am Tommy Hudson dammit. What do you mean I have no rights … I am a share holder … WAAHHHH WAAAHHH WAHHHH Now I have lost control and I cant make the board do what I want … waaahhh… and now that my old analysts, who actually really know these companies cold and added alll of the value and analysis in each case have seats I am screwed…
    Oh well… at least these investors still have a bunch of money in me… about $1.3 billion times 2% is not a bad living… I love management fees… so I will let everyone go.. and then just count my cash each month and put my portion of the fund in T-Bills

  7. Posted by Robert Culliford | November 29, 2006 at 9:36 AM

    Go look at the all the 13D’s Pirate has filed. They all say the same thing: Maximize shareholder value by getting rid of your poison pill and appointing Mr. Pirate Employee to the board.
    The only useful activist play they were ever in was Walter, which would have been worth $70 (when it was trading at $35) if the company had actually implemented their plans. Instead, Walter ran up on it’s own due to higher coal prices and, quite frankly, a run up in the Russell 2k.
    The fact of the matter is that Pirate was a simple 3-strategy play: 1, invest in the Russel 2k (very strange correlations). 2, buy companies with real estate (wonder what will happen to those companies. Maybe I can look at GenCorp for a clue). 3, make a lot of noise to make investors think you’re creating value.