Michael Baker attracts interest from second investor
Another shareholder of Michael Baker Corp. is pressing the engineering company's board to put it up for sale and vowed to nominate its own slate of directors if the current ones don't act.
Crescendo Partners, based in New York, sent the Moon Township company's board a letter late Thursday, in care of Chairman Richard Shaw, urging the sale and suggesting it could fetch at least $30 a share.
“Michael Baker's an incredible engineering franchise, but the valuation is very, very low” relative to its peers and to cash flow, said Arnaud Ajdler, senior managing director of Crescendo Partners, by phone Thursday. “That's what got us interested in the first place.”
Crescendo's push comes a week after an unsolicited offer of $24.25 a share made Dec. 19 by DC Capital Partners of Alexandria, Va. The firm, which owns 5.2 percent of Michael Baker, proposes to merge it into KS International LL of McLean, Va., an engineering company controlled by DC Capital Partners.
Michael Baker shares closed on Thursday at $24.30 a share, up 27 cents.
“Crescendo has a history of doing proxy fights” since its founding in 1998, said Ajdler. “This would not be the first time for us to do this.”
For instance, Crescendo staged a proxy fight with chain restaurant operator O'Charley's Inc. in early 2008. As a result, the company expanded its board size to accommodate Crescendo's slate and agreed to hold director elections more frequently. O'Charley's was sold for $221 million in cash to Fidelity National Financial Inc. last February.
In the letter to Michael Baker, Crescendo said shareholders are “frustrated by the company's poor performance,” citing a 40 percent drop in share value over the past five years.
Ajdler did not disclose how many company shares Crescendo owns. Investors are required to disclose if they own more than 5 percent.
The partnership also argued that the sudden resignation of Michael Baker CEO Bradley Mallory on Dec. 12 “complicates any turnaround efforts of the company,” which recently embarked on a cost reduction plan.
Michael Baker's board is reviewing Crescendo Partners' letter and will “respond in due course,” said company spokesman Daivd Higie.
“Crescendo believes a sale of the company at this time would be the most prudent and effective way to deliver maximum value to shareholders on a risk-adjusted basis for both the short- and long-term,” read the letter from Ajdler.
Thomas Olson is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Mortgage rate slide’s impact could be minimal
- Education Management removes itself from Nasdaq listing
- Amid struggles, top fiscal executive to leave EDMC
- Highmark seeks double-digit increase for more benefits, heavy use
- Rule to close coal royalty loophole
- SEC approves looser mortgage lending guidelines
- Toy sellers to enhance marketing as holidays approach
- PUC approves Columbia Gas pipeline extensions program for homeowners
- Stocks jump on strong earnings, led by 3M, Caterpillar
- Falling fuel prices help airlines — not fliers
- World’s 1st carbon capture power plant switches on in Canada