Starboard reduced its stake in Brinks Co (BCO) after gaining Board seats.
Key Summary: Brinks provides secure logistics and cash management services globally. Starboard (12.4%) pushed for operational improvements and gained board representation in 2016, reducing its stake to 3% by 2017. Gamco advocated transparency in potential sales and criticized undervaluation, decreasing its stake from 5.26% (2012) to 4.1% (2017).
Market Cap: $3.9 billion | The Brink’s Company provides secure logistics and security solutions, including cash-in-transit, ATM replenishment and maintenance, secure international transportation of valuables, and cash management services to financial institutions, retailers, government agencies (including central banks and mints), jewelers, and other commercial operations worldwide.
(i) Starboard:
- On October 5, 2015, Starboard (12.4%) sent a letter to the CEO, CFO, and the Board. The letter:
- Cited concerns over the company’s long track record of poor performance and failed turnaround attempts.
- Expressed Starboard’s belief that there is an opportunity to significantly improve the company’s profit margins to levels in line with, or better than, its direct peers.
- Outlined the components of a more comprehensive operational turnaround to substantially increase shareholder value.
- Stated its belief that, when the operational improvement plan is successfully executed, it will increase EBITDA by more than 60% over the next 12–18 months. Source
- On January 3, 2016, the company entered into a Nomination and Standstill Agreement with Starboard (12.3%). Pursuant to this agreement, the company increased the board size and appointed one candidate from Starboard and two additional new candidates to the board. Source
- On August 2, 2017, Starboard reduced its stake to 3%.
(ii) Gamco:
- In March 2013, Gamco sent a letter to the Chairman of the Board stating:"Your colleagues explained to us that you are not currently in negotiations with any entity to sell the company. We feel strongly that should a buyer surface, you should put that information in the public market. Since we have knowledge of the industry, we are aware of which strategic buyers would have the least structural issues in pursuing a transaction with your company. We are neither for management nor against management. We are for shareholders." Source
- On December 16, 2014, Gamco stated that it was considering the nomination of one or more directors at the 2015 annual meeting. It expressed its belief that the company trades at a significant discount to its Private Market Value. Source
- On February 15, 2017, Gamco decreased its stake to 4.10%, down from 5.26% in February 2012
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