This Week's Activist Filings

Shareholder activism was very prevalent in the past week or so. Several activist specific filings were recently disclosed asking for specific corporate action. Aerospace and defense company Breeze-Eastern (NYSE:BZC) is currently on the radar of hedge fund VN Capital. Breeze-Eastern is interesting because the company has a market cap of $66 million thereby eliminating most large investment funds from participating should they choose to. According to Barron's, VN holds 5.3% of the company's shares and said in its filing with the SEC that it wants to discuss management's current strategy in hopes of avoiding future risks. VN believes the shares in BZC are undervalued. Further, the seven other large shareholders in BZC account for over 85% of company's stock and VN also expressed interest in working with them to eliminate costs and unlock shareholder value. (For more, see Activist Hedge Funds: Follow The Trail To Profit.)

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Pushing for Strategic Alternatives
Elsewhere, hotel company Red Lion Hotels (NYSE:RLH) continues to see pressure from its largest shareholder, Columbia Pacific Advisors. Columbia owns over 22% of the $160 million owner/operator of 45 full and midscale hotels. After pushing the company to sell itself, Columbia is now urging Red Lion to sell assets. In addition to owning 19 hotels, Red Lion also has an ownership interest in various other pieces of real estate. Shares in Red Lion trade for $8, or 85% of stated book value.

MPG Office Trust (NYSE:MPG) is a REIT operating in California. Not surprisingly, MPG has been hurt badly as a result of the real estate crisis. The company currently pays no dividend, once a hallmark of REITs. Shares trade for $2.41 and value the company at just over $100 million. Two investment funds have teamed up to push for change. Mariner Investment Group and Aristeia Capital, owners of 5.2% and 3.9%, respectively are pushing to elect two directors to the company's board.

Fighting for the Land
Mutual fund Wintergreen Advisers, run by highly successful value manager David Winters is attempting to effect corporate governance changes at real estate and land company Consolidated Tomoka Land (NYSE:CTO). Wintergreen is seeking to nominate a new member to the company's board as well de-stagger director elections. Wintergreen has been a big believer in CTO for some time and owns 27% of the company. It will likely find success in its efforts.

The Bottom Line
With the stock market looking to wrap up two solid years of quality returns, underperforming businesses will come under significant pressure from large shareholders to create value. If successful, such issues could be one remaining pocket of fertile hunting ground for investors seeking value. (For more, see Activist Investors: A Good Thing Or Bad Thing?)

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