Thursday, August 13, 2009

A shareholder fights back!! (RATE)

AlphaNinja - A (RATE) shareholder has filed a 13D, in which they accuse the company's board of directors of selling the company to a management-affiliated group for a price that undervalues the business.

I wrote previously that the company was being effectively swiped from shareholders:

AlphaNinja on 07/22/09 - IMPORTANT -->> former CEO Peter Morse, who owns almost 4million shares, is likely part of the buyout group. Remember the risk you run with company stock concentrated in the hands of management. This guy thinks the company is worth more privately run rather than publicly, and he's running off with the company.

Back to today - Philippe Laffont of Coatue Management, a 9% shareholder, outlines why he thinks the deal is a bogus one:

Laffont goes on to point out that management and the board cite "trough" earnings when justifying a takeout price, and that looking out to 2012, the company is worth more. He makes several more points, including the prohibitively expensive breakup fee (paid by another bidder, in effect to discourage a higher deal price.

Cheers to this man, for at least attempting to get what he sees as a fair price, and for highlighting management and the board's borderline criminal negligence. Laffont concludes:

"In short, we believe that the sale of the Company to Apax and management is grossly unfair to existing shareholders because it significantly underestimates the true long-term value of the Company. We also question the integrity of the process in light of numerous conflicts of interest. As noted in the Schedule 13D that we are filing today with the Securities and Exchange Commission, we intend to oppose the transaction and to be in contact with other like-minded shareholders.


Philippe Laffont

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