Shareholder activist hedge fund manager Ramius Capital Group, which is led by its founder Peter Cohen, has uncharacteristically opposed another shareholder activist firm's proposal. On January 22 Ramius Capital announced its plans to vote against a special meeting shareholder proposal for MAK Capital and Paloma International to increase their ownership in Agilysys Inc. (AGYS) above 20%.
According to a recent HFS Catalyst Investment Research Report, the reasons Ramius Capital provide include: (i) the proposed Control Share Acquisition is not in the best interests of the Company’s shareholders and (ii) that this potential level of ownership by MAK and Paloma would provide the firms with disproportional influence and control over the Board of Directors and corporate policy.
Notably, Ramius Capital currently holds 2,037,712 shares or 8.8% of Agilysys Inc’s shares outstanding. The hedge fund manager also has its own shareholder activist history with the company, which resulted two Ramius nominiees being added to AGYS’s board of directors in March of 2009
MAK and Paloma together own 19.2% of AGYS at an average cost of $13.44. Under Ohio law they are required to request shareholder approval to increase their ownership above 20%. As a result, they have requested a special meeting to approve their increase in ownership to 33.3%. The special meeting is scheduled to be held on February 18, 2010.
Additional materials are available here.
Ramius Capital's Shareholder Activist History with AGYS:
The HFS Catalyst Investment Research Report previously covered AGYS in our November 27 and March 13 2009; October 24, October 19, June 27 and June 6 2008 reports, highlighting AGYS’s appointment of one individual from MAK Capital to the board and the formation of a committee to review strategic alternatives.
On October 10 2008 Ramius Capital criticized the board for creating undue uncertainty and significant unwarranted risk to shareholders and claimed they had breached their fiduciary duties by pre-announcing poor earnings figures. Ramius also demanded AGYS update shareholders on the sale process and reiterated their belief that AGYS could be sold for $10.80 to 17.27/share.
On October 22 2008 AGYS announced that the Board had completed its review of strategic alternatives and concluded that the best course of action to maximize shareholder value is to remain as an independent company, realign its cost and overhead structure, and drive value creation.
On March 11 2009 AGYS entered into a settlement agreement with Ramius Capital. Under the terms of the agreement Ramius appointed two people to a board that will not exceed nine members.
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