Seeking Alpha
Profile| Send Message| ()  
In a 13D filing after the close Friday on Brink's Company (BCO), Pirate Capital disclosed a letter to Chairman and CEO Michael T. Dan, reporting the results of a survey of the 100 largest shareholders indicating they support the separation of the company into two publicly traded companies through a tax-free split-up.

In the letter, Pirate Capital's Thomas R. Hudson said,

While a sale of the company, as opposed to a tax-free split-up, could be more lucrative to you under your change in control agreement with Brink's, potentially enriching you with millions of dollars, I believe the survey is conclusive as to the large shareholder preference for a split-up. Based on the survey (excluding quantitative/indexed shareholders that could not take part), DF King concluded that a majority of the shareholders surveyed supported a tax-free split-up.

Hudson also said,

I think it is reasonable to assume that if you, as Chief Executive Officer and Chairman of the Board of Brink's, do not now pursue such a strategy with the board, that other shareholders may consider voting you off the board at the 2008 annual meeting. Maybe if you spent less time driving around in company provided cars, flying around in corporate aircraft, or golfing at the corporate golf course, and instead focused on listening to the owners of the company (the shareholders), you would be able to move the company strategically in the direction apparently favored by shareholders.

Hudson is a member of Brink's Board of Directors.

A Copy of the Letter:

Dear Michael:

Pirate Capital LLC, at considerable expense, hired D.F. King & Co., Inc. ("DFKing") to conduct a survey (based on best available public information) of the100 largest shareholders of The Brink's Company ("Brink's") to determine the extent of shareholder interest in having Brink's separated into two publicly traded companies through a tax-free split-up. While a sale of the company, as opposed to a tax-free split-up, could be more lucrative to you under your change in control agreement with Brink's, potentially enriching you with millions of dollars, I believe the survey is conclusive as to the large shareholder preference for a split-up. Based on the survey (excluding quantitative/indexed shareholders that could not take part), DF King concluded that a majority of the shareholders surveyed supported a tax-free split-up. A summary of the survey provided by DF King is attached as Appendix A. I think it is reasonable to assume that if you, as Chief Executive Officer and Chairman of the Board of Brink's, do not now pursue such a strategy with the board, that other shareholders may consider voting you off the board at the 2008 annual meeting.Maybe if you spent less time driving around in company provided cars, flying around in corporate aircraft, or golfing at the corporate golf course, and instead focused on listening to the owners of the company (the shareholders),you would be able to move the company strategically in the direction apparently favored by shareholders.

Brink's latest earnings release and your public comments stating that you "live inside the house," and suggesting that you had superior knowledge as to why only the status quo was an appropriate course of action for Brink's at this time(without giving any meaningful proof of that) is insulting to all shareholders.The shareholders of Brink's deserve to know why you (and/or the board) do not support a split-up of the company at this time given the shareholder analyses provided to you showing that such a split could significantly increase Brink's' share price.

You have publicly stated the board utilized the services of multiple advisors to reach the conclusion not to split the company at this time. Given that this outcome is inconsistent with the calls from the shareholder base to split the company, I believe that you should immediately release the advisor analyses to your shareholders (via a public filing) along with any presentations that may have been made to the board by these advisors. If there is any information that is truly sensitive to Brink's from a competitive standpoint, that information could easily be redacted. If the board, as you have publicly stated, truly analyzed multiple options for Brink's (which certainly would have included a split of the company), then publicly release the range of values (both trading and acquisition values if applicable) these advisors concluded would be possible for Brink's to achieve as two publicly traded entities. What are you afraid of Michael? If you and/or the board have decided the company should maintain the status quo then I believe you have an obligation to the shareholders (owners) of Brink's to tell them why (in detail, with supporting presentations) you wish to continue operating Brink's as a single entity and not pursue a simple split-up of the company to eliminate the conglomerate discount the company now suffers from.

These are not rhetorical questions Michael. I and the rest of the shareholder base deserve answers.

Respectfully,
Thomas R. Hudson Jr.
Manager

Source: Pirate Capital To Brink's: Quit Flying Around in the Corporate Jet and Split-Up The Company