MMI tells Brink's to sell

Thursday, December 21, 2006

NEW YORK, N.Y.--Another hedge fund has urged The Brink's Company to consider putting itself up for sale.
Saying the company is "chronically undervalued," MMI Investments, a hedge fund run by Clay Lifflander here that owns about 8.3 percent of Brink's stock, in a Dec. 18 SEC filing urged the company to undergo a "strategic alternative review."
This move echoes, in some ways, repeated demands in the past several months from activist hedge fund Pirate Capital--which also owns about 8 percent of Brink's shares--for Brink's to explore a sale.
While MMI said it hadn't spoken with Pirate Capital, it said in its filing that it intends to support a Pirate proposal at Brink's spring 2007 stockholder meeting to engage an investment bank to explore strategic alternatives.
It also follows, and not coincidentally, according to Jack Mallon, managing partner of Mallon Associates, the much discussed sale of HSM to Stanley Works for a historically high multiple.
"I think the investors see the high multiple paid for the alarm piece and figure that's how they can maximize their return," Mallon said. The "astronomical" multiple paid in that instance he said, "may have affected the timing of ... MMI's decision to turn up the pressure."
As he did when Pirate first starting making noise about a sale, Mallon said that MMI is "off the mark in making the statement that Brink's is chronically and severely undervalued. They're somehow missing the fact that the stock has been on a tear." It's up 32 percent over the past 52 weeks, he said.
MMI, in a supporting document to the filing, mentions General Electric, UTC and Siemens, as well as a management buyout, as potential buyers. Mallon discounts General Electric and UTC as not good fits and said Siemens and a management buyout, while possible, are not likely.
The Brink's Company spokesman Ed Cunningham said, "We are in receipt of the filing. We're always interested in what our shareholders have to say and we listen carefully, and share them with our board." Brink's has a long-standing policy of not disclosing the dates of its Board of Directors' meetings, he said.