Gamco wants Fisher Communications to Undertake a Leveraged Restructuring

August 13th, 2012
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Contributed by: Hedge Fund Solutions LLC
On August 6, Gamco sent a letter to Fisher Communications Inc.’s (FSCI) President and CEO recommending that the Company undertake a leveraged restructuring by financing the debt through a bond issue to existing shareholders (thereby reducing the cost of a capital raise.)

Historical Activist Comments:

Activist Holding info
Shares2,547,556
% Outstanding28.70%
Company info
Share Price33.15
Revenue$162M
Market Cap$294M
Enterprise Value$231M
Net Cash$64M
EBITDA$28M
52 wk. range21.90 - 34.15
EV/EBITDA8.2
The Catalyst Equity Research Report previously covered FSCI in our April 6, 2012; May 6, 2011, January 28, 2011; March 27, January 30, 2009; November 21, June 27, April 25, April 4 2008; and April 20 2007 Catalyst Research Reports. In 2007 Gamco, TowerView (9.7%) and FrontFour Capital (2.0%) tried to convince the board to examine the sale of certain assets worth $200M and require shareholders to vote on acquisitions over $25M. Both Gamco and TowerView withheld their votes for directors at the 2008 annual meeting.

On June 24 2008 FrontFour Capital sent a letter expressing their disappointment with the Board’s unwillingness to engage in discussions with a potential buyer. In addition, FrontFour demanded they hire a bank to examine strategic alternatives and suggested that if discussions with potential buyers do not result in a transaction, the Board should return cash to shareholders.

On January 30 2009 GAMCO sent a letter to FSCI nominating three individuals (including David Lorber from FrontFour Capital) to the board for election at the annual meeting. On March 20 2009 FSCI entered into a settlement agreement with GAMCO. Under the terms of the agreement FSCI agreed to nominate two individuals recommended by GAMCO to the board.

On January 27 FrontFour nominated four individuals for election to the board at the 2011 annual meeting. If elected, FrontFour said their candidates would support and pursue a robust and impartial strategic review process aimed at selling the company to the highest bidder.

On January 3 FSCI disclosed they had received an unsolicited $211M buyout offer ($23.99/share in cash and stock) on December 6, 2010 from Huntington Real Estate Investment Trust. The majority of the board determined the offer was not in the best interest of shareholders. David Lorber from FrontFour Capital is a board member at FSCI and a Trustee with Huntingdon. FrontFour is also Huntingdon’s largest shareholder.

On May 3, 2011 GAMCO announced they will cumulate their votes for three of FrontFour’s four director nominees at the Company’s May 11, 2011 annual meeting.

On April 2, 2012 Gamco sent a letter to FSCI asking them to consider a leveraged restructuring similar to the one executed by Multimedia in 1985. Gamco suggests FSCI form Newco, which in turn will buy FSCI for $40/share. FSCI will distribute $36 per share in cash and one share of stock in Newco to existing shareholders.

Hedge Fund Solutions (HFS) is a Philadelphia-based investment research and strategy consulting firm focused on providing substantive solutions on issues relating to shareholder activism. The Firm has an unparalleled depth of knowledge on activist investing and has become the trusted advisers to numerous institutional investors, CEOs and board members worldwide. For more information on Hedge Fund Solutions or to sign-up for their Catalyst Equity Research Reports, please click here.
For Detailed Investor Profiles on these Investors, click below:
GAMCO Asset Management
Related People: Howard F. Ward; Mario J. Gabelli
Related Entities: Gabelli & Company, Inc.; Gabelli Asset Management*; Gabelli Growth Fund; Gabelli Small Cap Growth Fund; Gabelli Value Fund
Related Article Tags: Shareholder Activists, Corporate Raiders and Proxy Battles; Hedge Fund Resources and Featured Partner News


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