Brahman Grp Says Corporate Express Should Consider Merger
(NewsTraders.com) -- A group including Brahman Capital Corp. revealed a 7.1% equity stake in Corporate Express (CEXP) and is urging the company to hire a financial advisor to explore its strategic alternatives, according to an original Schedule 13D filed today with the SEC.
The group said it has recently held discussions with the company concerning its dissatisfaction with the performance of the firm's common stock as well as the firm's overall financial performance and direction. In a Jan. 4 letter to Corporate Express, the group said the company should make Robert King the Chairman and CEO and hire an investment banker to evaluate strategic alternatives, including a merger with a partner that provides significant operating synergies.
"These recommendations are fundamental to achieving shareholder value, but are only a start," the group said in the letter. "Tangible action is required to evidence that the board is prepared to take the necessary steps to put an end to the steady decline in the Company's market value. If no steps are taken to address these items by the end of January, we will be compelled to become activist shareholders," the group added.
The group said that if no action is taken by January 31, it may hold talks with other shareholders and third parties on potential changes to the company, including selling the company, disposing of one or more lines of business, changing the senior management or board of directors, reviewing compensation policies and retaining third-party advisors.
No further details concerning the group's future plans were disclosed.
Brahman Capital has entered into an agreement on Jan. 4 with another member of the group, Marlin Partners I L.P., under which Brahman has agreed to pay Marlin an advisory fee equal to 15% of the profit it receives from the Corporate Express shares it currently holds. If Brahman sells the stock, it must pay Marlin the 15% fee. Otherwise, the 15% fee is payable to Marlin on June 30, 2000, the date the agreement terminates.
The group revealed recent purchases of 712,300 shares at prices ranging from $4.70 to $11.13 per share between 11/3/98 and 12/30/98 on the NYSE. The group also sold 270,200 shares at $5.57 to $11.11 per share between 11/3/98 and 12/10/98. |
