Shamrock Holdings Urges Brink’s Board To Explore Sale of the Company
BURBANK, Calif. -- November 05, 2012
Shamrock Holdings Inc. (“Shamrock”), shareholder in The Brink’s Company,
announced today that President Stanley P. Gold sent a letter to the Board of
Directors urging the immediate consideration of strategic alternatives,
including the sale of the company, in the wake of a five-year stock price
decline of more than 60%, "years of empty promises and failed initiatives" and
continuing deficiencies in corporate governance.
Below is the text of Mr. Gold’s letter to the Brink’s board:
November 2, 2012
Board of Directors
The Brink's Company
P.O. Box 18100
1801 Bayberry Court
Richmond, VA 23226-8100
Attention: Murray D. Martin, Lead Director
Ladies and Gentleman:
We are shareholders of The Brink's Company, and we are writing to urge the
Board of Directors to address meaningfully Brink's continuing underperformance
by launching an immediate exploration of strategic alternatives, including a
sale of the company.
The Brink's shareholders have suffered through years of empty promises and
failed initiatives. In the last five years, Brink's stock price has declined
by over 60%. Brink's stock price has also consistently lagged behind the stock
price of its key competitors. In the last year alone, Brink's was on the
bottom with an approximate 11% drop in share price. In contrast, G4S plc,
Loomis AB and Prosegur, Compania de Seguridad, S.A. (which are competitors
listed in the Company's 10-K) all increased their share value by at least 5%.
Unfortunately, we do not believe there is a realistic chance for improvement
by continuing on the existing path with current management. Over the past nine
months, the situation has only worsened under the tenure of new management.
The Company's earnings per share during this period plummeted from $.66 per
share to $.28 per share, a drop of over 57%. The more than 7% drop in Brink's
stock price since the Company's earnings announcement is simply more evidence
of the shareholders' lack of faith that the Company can turn itself around.
Brink's also has failed to address significant concerns regarding its
corporate governance. At the Company's 2012 annual meeting, almost 45% of the
shareholders followed ISS' recommendation and voted against the proposal on
executive officer compensation. Given this shareholder outcry, we would have
thought that the Company would have been proactive in responding to the
shareholders' clarion call for change. However, more than seven months after
Michael Dan's departure was announced, the Board elevated board member Thomas
Schievelbein from an interim CEO and Chairman position to the permanent CEO,
President and Chairman of the Board. Taken at face value, this is an
inexplicable result that calls into question the effectiveness of the Board's
oversight over, and apparent lack of, succession planning and execution, all
in contravention of the Company's own corporate governance policies. Moreover,
by declining to separate the CEO and Chairman role, the Board continued to
demonstrate its arrogance in dismissing shareholder concerns regarding the
Board's poor corporate governance.
We do not think that current management has the skills to revive this once
dominant brand and company. Accordingly, we believe that the Company's best
alternative to improve shareholder value is to launch a thorough review of all
strategic alternatives, including a sale of the entire company. In our view,
Brink's would be an attractive acquisition target. Just last month, Garda
World Security announced it will be acquired by a private equity company at a
30% premium. Applying the transaction metrics in the Garda transaction,
Brink's would be valued at approximately $40 per share, or a 57% premium to
the current stock price. Moreover, Brink's may be appealing to strategic
acquirers who are looking to expand in the U.S. or buttress their operations
in Europe or Latin America. We do not believe this management continuing to
operate under the supervision of this Board could come close to approaching
the shareholder value that can be obtained in a sale. Even if management could
devise a recovery plan, the execution risk associated with its implementation
would make this track far less desirable for shareholders than a sale.
Accordingly, the Board should promptly form a special committee comprised of
independent directors to explore all strategic alternatives for the Company
before shareholder value is further eroded.
We would like to participate in the effort to create value for all Brink's
shareholders by engaging the independent directors of the Board in a
constructive discussion about these areas of critical concern, which we
believe that other shareholders share. Given the drop in Brink's share price
and persistent underperformance, we hope the Board does not continue to turn a
tin ear to its shareholders and agrees to meet with us promptly. Please
contact me as soon as possible so we can set up a time to meet.
Very truly yours,
Stanley P. Gold
Photos/Multimedia Gallery Available:
Shamrock Holdings Inc.
Clifford A. Miller, 818-973-4297
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