Shareholder Activist Update: Riley, DellaCamera and Icahn

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 |  Includes: ENZN, WPCS
by: Todd Walker

Since late January, Riley Investment Management has purchased and currently holds approximately 482,543 shares or 7% of shares outstanding of WPCS International Inc. (NASDAQ: WPCS). On February 22nd, Riley stated that the terms of the five year evergreen employment agreements for the CEO and CFO of WPCS reflect corporate waste and mismanagement by the Board. The firm has also submitted a books and records request pursuant to Section 220 of the Delaware General Corporation Law to determine any evidence of the agreement constituting a breach of fiduciary duty by the Board.

Hedge Fund Solutions previously mentioned WPCS’s February 26th press release in a Catalyst Research Report. The release stated that RIM and LCC International, a firm where RIM’s Bryant Riley is a director and 40% shareholder, met at WCPS’s headquarters and LCC expressed interest in merging with WPCS. Afterwards, WPCS adopted a Poison Pill with a 15% trigger. The press release also stated that the new shareholder rights plan is

designed to discourage coercive or unfair takeover tactics and provide fair and equal treatment for all WPCS shareholders in the event an unsolicited offer is made to acquire the company.

In other shareholder activist news, DellaCamera Capital Management nominated two board members for Enzon Pharmaceuticals Inc. (NASDAQ: ENZN) for election at the next annual meeting. The firm currently holds 3,635,000 shares of Enzon or 8% of shares outstanding.

Hedge Fund Solutions previously mentioned ENZN in several Catalyst Research Reports, highlighting Carl Icahn, who currently owns a 6.2% stake in Enzon, and his public request to Enzon to look at strategic alternatives. The reports also mentioned DellaCamera’s constant requests for Enzon to be sold and to remove three board members on its compensation committee. On July 1st, 2008 the firm ordered Enzon to take action to increase stockholder value. On January 7th, 2009 they nominated two board members and threatened a consent solicitation to change Enzon’s bylaws and remove the CEO. Enzon responded positively so the consent solicitation was withdrawn.

Disclosure: No positions