WASHINGTON — A minority shareholder is pushing textile rental company Angelica Corp. to put itself up for sale, according to regulatory filings, but Angelica says its continued exploration of strategic alternatives renders the shareholder’s proposal moot.
Pirate Capital, which owns a 9.8% stake in the company, filed a proposal July 2 with the Securities and Exchange Commission (SEC). In it, the investment adviser demands that Angelica’s board “engage a nationally recognized investment banking firm to explore all strategic alternatives to increase shareholder value,” including the sale of the company and its assets. Pirate Capital threatens to nominate persons to Angelica’s board at the upcoming annual shareholders meeting if its demand isn’t met.
In an SEC filing Tuesday, Angelica says investment banker Morgan Joseph & Co. has been assisting the company in reviewing its strategic alternatives since February 2006 and that Angelica’s board just extended that arrangement through June 30 of next year.
Pirate Capital has criticized Angelica for investing more than $125 million in acquisitions between 2003 and 2006 that Pirate Capital claims haven’t boosted the company’s value, according to its filings. “In our opinion, either there was considerable value dissolution in rolling up the previous acquisitions, or Angelica greatly overpaid for the acquisitions,” Pirate Capital says in a July 12 letter to Angelica’s board.
“Over the past three years, Angelica’s management team has been afforded ample time and opportunity to deliver growth and rejuvenate the company as an ongoing concern, but has demonstrated little success in this respect,” Pirate Capital adds.