Unisys: Is A Proxy Fight Brewing?
Things are heating up in Blue Bell.
June 2 is the deadline for nominations for the 4 open board seats at Unisys (UIS), the troubled computer hardware and consulting company created in 1986 from the merger of Burroughs and Sperry. Activist investor Millbrook Capital, which has a 9.9% stake in the company, has been leaning on the Unisys board to take action to enhance shareholder value; the company responded earlier this year by postponing its annual meeting and hiring Bear Stearns as a financial adviser. Millbrook previously proposed that the company sell or spin off its government services business.
Clearly, something has to happen soon; Millbrook could nominate a dissident slate if the company does not take action before the upcoming deadline. In a research note this morning, UBS analyst Jason Kupferberg thinks it is still possible a proxy fight can be avoided, but contends “bolder action” is required beyond the cost-cutting measures of recent years, including strategic actions and management changes.
Kupferberg, who has a Buy rating on the stock, says a sum-of-the-parts analysis finds the company worth $7 to $7.50 a share, “indicating that the secular decline of the hardware business and very spotty execution have prevented the stock from achieving its potential.”
Stay tuned to this one; it could get interesting in the next few weeks.
UIS today is up 5 cents, or 1.2%, to $4.40.
it is time the President and all of his crony BOD …left the buiding …………good for Millbrook …………new blood is needed …..break it up and sell the garbage ……I cannot believe that there are not great opportunities in this company ….the expenses are too high ..the revenue is flat ………good relationships with Dell H P and Msft ……
Milbrook made a bad investment for it’s investors, and can’t just can’t seem to let go. They sent good money after bad. Anyone that knows anything about turn-arounds knows it can take 10-12 years to turn a good company to great, and I’m not saying UIS is a ‘good’ company. As Cramer always says, “Do Your Homework!”
Tech Trader Daily is a blog on technology investing written from Palo Alto, California by long-time Barron's West Coast Editor Eric J. Savitz. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields.
