Sybase Holder Sandell Asset Wants a Buyback, Spin-Off or Sale

In a 13D filing Friday on Sybase, Inc. (NYSE: SY), Sandell Asset Management disclosed a 6% stake in the company and urged the company to pursue various options to improve shareholder value including (i) aggressive use of balance sheet to repurchase shares, (ii) IPO and spin-off 100% of mobility segment and (iii) sale of the Issuer in whole or in part.

In a presentation to Sybase, disclosed in the filing, Sandell commented on the three recommended options:

(i) For the share buyback, Sandell said assuming Sybase repurchases $500mm of shares each year for 3 years, the company could create value of $33/share.

(ii) For the IPO and Spin-Off of the mobility segment, Sandell said EMC’s (NYSE: EMC) IPO of VMWare (NYSE: VMW) demonstrates the ability to generate shareholder value by highlighting hidden growth within a more mature entity. The firm said their analysis indicates that their proposed series of transactions will conservatively create total shareholder value of at least $31-$33/share for Sybase.

(iii) On a sale of the company, Sandell said, based on multiples of prior transaction, Sybase could be worth up to $41.39 per share in a deal. Sandell also said, should the credit markets recover, Sybase is likely an attractive LBO candidate.

Shares of Sybase were up 4% following the 13D filing.