Millbrook's Lifflander Demands Big Changes at Unisys

January 8th, 2008
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In a 13D filing today, Millbrook Capital Management (MCM) expressed their dissapointment with Unisys Corp.’s management. MCM is currently one of Unisys’ largest shareholders, owning 9.9% of the outstanding stock. In a letter to Unisys, Millbrook’s President Clay Lifflander, claimed that over the past year that he “has supported the company’s restructuring efforts, but felt tremendous frustration with the seemingly continuous stream of management, operational and financial missteps that have characterized recent performance, obscuring otherwise impressive growth in EBITDA as a result of the restructuring and undermining the significant intrinsic value of Unisys’ U.S. Government business…We believe Wall Street’s utter rejection of Unisys stock is indicative that the restructuring benefits are not enough to correct Unisys’ dramatic undervaluation. We believe that Unisys has serious flaws in its strategic configuration, which impair stockholder value due to the taint of the secularly declining Technology business and obscure market recognition of the highly-valuable U.S. Government business. Therefore we believe it is crucial that Unisys move immediately to announce the engagement of an independent, qualified investment bank to perform a review of all available strategic alternatives, with a particular focus on the potential realization of the U.S. Government business through a sale, tax-free spin-off or subsidiary IPO.”

Lifflander presented that “the best alternative would be an initial public offering of 19% of the shares of a subsidiary of Unisys comprising all of its U.S. Government services business. This would allow for the highest multiple business to have its value recognized, raise equity capital for the company at an attractive price and provide employees of that unit with financial incentives as owners. Doing so would also preserve flexibility, including the ability to further monetize the business through the public market, sell the business with an M&A control premium or eventually complete a tax free spin off of the balance of the subsidiary shares to Unisys stockholders.”
See Filing
For Detailed Investor Profiles on these Investors, click below:
Millbrook Capital Management (MMI)
Related People: Clay Lifflander; John S. Dyson
Related Entities: Dyson Family; MMI Investments, L.P.; MMI LP
Related Article Tags: Shareholder Activists, Corporate Raiders and Proxy Battles


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