Shareholder Revolt at Brinks

international | crime and justice | press release

Thursday December 06, 2007 08:51

by Domhain Sceadaman - The Plain People of Ireland

domhainsceadaman at gmail dot com

+1 (702) 922-3438

Second Largest Shareholder wants to Sack most of the Board

A beleaguered Michael Dan, the Chairman and CEO of security giant Brinks was being tight lipped today after the revelation that his largest shareholders are unhappy about the way that the company is being run. The big shareholders want four of the companies directors sacked.

Dateline New York 12-05-2007
By Stella Robbins APR and Domhain Sceadaman, of PPI, in Dublin

Shareholder Revolt at Brinks

A source in Wall Street today revealed that The Brinks Company (Stock BCO NYSE) was facing one of the largest shareholder revolts seen on "the street" in recent years. The second largest shareholder in the company, has nominated four new directors to the board in a direct challenge to the authority of the Chairman and CEO. External shareholding funds usually agree a suitable board nominee with the company. This adversarial approach is very unusual.

Hedge Fund, MMI Investments LP, who currently own, or control. around 8.5% of the share capital have stated that they are very unhappy with the current performance of the board of directors, headed by Mr Michael T. Dan. Mr Clay Lifflander of MMI stated that

"We simply believe that the board as currently composed has demonstrated that it lacks the security industry perspective, strategic alternatives acumen and stockholder representation necessary to protect and maximize the value of Brink's stockholders investment"

Lifflander continued

"The current board has been unable to optimize the company's business through internal development, mergers and acquisitions or break up the company"

Brinks has underperformed in its sector recently. MMI battled to force Brinks to divest itself of its air freight subsidiary, ATI. A terse statement was released by the Brinks Company which stated that the company would consider the nominations"in due course" and remains "highly committed to enhancing value for all shareholders." Earlier this year another investment company, Pirate Capital, which currently owns, or controls, around 4.5% of Brinks shares was successful in having Thomas Hudson Jr elected to the board.

The security industry has been going through a period of dramatic change. Brinks have lost contracts in the UK recently and have been forced to sell the bulk of their UK business for a reputed knockdown price of £1.1M. Earlier this year a report in Ireland's Sunday Tribune revealed that Ireland has the worst record in Europe for cash-in-transit robberies. Garda (police) in Ireland estimate that 68% of cash-in transit robberies have "inside" assistance. The reported liquidation of Heros, Germany's largest Cash in Transit company after the loss of a reputed €500M to employee embezzlement by a group led by the companies CEO and senior managers, has also cast a shadow over the entire industry.

Brinks in the USA are also embroiled in a tussle with Gerry Creechan Marketing, of Dublin and New York, in relation to unauthorised possession of Intellectual Property owned by Gerry Creechan. Neither side would confirm today the rumor that this saga is costing Brinks in excess of $250,000 per month and may result in an additional multi-million dollar damages claim, leading to a substantial charge against fourth quarter earnings.

Brinks shares closed today (Tuesday) at 61.37, down 0.88 on the day and down from a 52 week high of 68.47.

Additional reporting from Franki Fitzpatrick.

ENDS.

Further comment APR - Voice/Fax USA +1 (702) 922-3438 0900-1800 EST

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Shareholder Revolt at Brinks