Evermore Calls for Update on Strategic Review Process in Letter to ModusLink's Chairman
Evermore Global Advisors, an investment manager that employs an active value investment discipline to find undervalued companies anywhere in the world with the potential to yield long-term value for investors, has notified the board of directors of ModusLink Global Solutions (NASDAQ: MLNK) that it fully supports the news that Joseph C. Lawler is retiring as chief executive of ModusLink.
In a letter to ModusLink's chairman, Francis J. Jules, Evermore chief executive David E. Marcus wrote, "As we pointed out in our initial letter to you in October 2011, we thought it was time for Mr. Lawler to go given his long history of value destruction."
Mr. Marcus also noted disappointment of the accounting irregularities that ModusLink disclosed on June 11th even though it appears to be de minimis relative to total revenues.
Mr. Marcus also demanded that the ModusLink board update shareholders on the strategic review process that the company began in November 2011. The board has been silent on the process, even though ModusLink's stock price has steeply declined since the company launched its strategic review.
"We believe that despite all of the missteps by management and the board, there is substantial shareholder value remaining and it must be crystallized," Mr. Marcus wrote. "It is time to put an end to the status quo and get these assets into the hands of willing buyers who can actually create value."
The full text of Evermore's letter to ModusLink's chairman is below:
Francis J. Jules Chairman of the Board of Directors ModusLink Global Solutions 1601 Trapelo Road Suite 170 Waltham, MA 02451
June 12, 2012
Dear Mr. Jules:
Accounts managed by Evermore Global Advisors own approximately 1% of the outstanding shares of ModusLink Global Solutions ("ModusLink"). We applaud yesterday's announcement that Joe Lawler is "retiring" as the CEO of the company, though it is obviously disappointing to learn of accounting irregularities, no matter how small the amounts are relative to revenues. As we pointed out in our initial letter to you in October 2011, we thought it was time for Mr. Lawler to go given his long history of value destruction.
We are writing to demand the board provide an update to shareholders regarding the strategic review process that ModusLink launched in November of 2011. While the board and management have remained silent on this process, the stock price has declined precipitously. We believe that despite all of the missteps by management and the board there is substantial shareholder value remaining and it must be crystallized.
It is time to put an end to the status quo and get these assets into the hands of willing buyers who can actually create value.
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