I neglected to blog this contribution I received some weeks back. The author accuses Baker Street Capital of double standards, because Baker Street Capital is doing exactly the same things to Pyne Gould shareholders about which they are complaining about in the letter. It appears that Baker Street Capital do not enjoy being beaten with the same stick which they are using to clobber Pyne Gould shareholders.
I edited some of it and provided links.
J
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Dear John,
Jackie xxx (Edited: name withheld) faxed me this letter that Baker Street (Edit: Baker Street Capital Management LLC) sent to a company called Tix Corporation in which they complain about the way the shareholders are being treated. Jackie is feeling more than a bit crook about this affair and still cannot believe that the family’s investment is worthless after they stuck with the Pynes for generations.
The family does not understand how these big shots can say one thing today and do another tomorrow. She feels the company directors lie and cheat and take money from trust funds and nothing ever happens to them. They know the FMA is a sham and expect nothing will come from their investigation, because they only care about the trust’s big pension fund investors.
She asks how can Baker Street write this letter to the directors of Tix and demand to be treated fairly when Baker Street is doing exactly the same thing to the shareholders of Pyne Gould? One day Baker Street is using their dagger to threaten directors at Tix and the next they are sticking it into the backs of people like us that have been with this company for a very long time. How can these American hedge funds do exactly as they want? She says that one day they want to be John Wayne and the next Mother Theresa? Here is the letter (Edited: Source, Bloomberg) and I will let you know if the FMA responds to Jackie’s fax, but regrettably I think she is right about them.
Ta,
Fxxx (Edited: name withheld)
P.S. Do these people actually believe this stuff they write?
LOS ANGELES, April 4, 2011 /PRNewswire/ -- Baker Street Capital, L.P. ("Baker
Street"), announced today that it delivered a letter to the independent
members of the Board of Directors of Tix Corporation (OTCQX: TIXC). Baker
Street is the largest shareholder of Tix Corporation, with current ownership
of approximately 21.9% of the shares outstanding. In the letter, Baker Street
outlined its view that the Board has a fiduciary responsibility to
shareholders to evaluate Baker Street's offer. We feel very strongly that
such exploration should be conducted by a special committee of independent
directors in a robust and full process to ensure that shareholders receive
fair value.
The full text of the letter follows:
Dear Independent Board Members,
As you know, Baker Street Capital, L.P., together with its affiliates
(collectively, "Baker Street"), is the largest shareholder of Tix Corporation
("TIX" or the "Company"), owning 5,451,259 shares or approximately 21.9% of
the Company's 24,856,893 outstanding shares of common stock.
Five days ago we submitted to you a letter (the "March 30 Letter"), a copy of
which is attached, which expressed our deep concern that senior management
might be in the process of exploring an acquisition of the Company at less
than full value. To protect our significant investment in the Company and
based upon our belief in the Company's long-term prospects our letter also
included a non-binding offer, subject to certain conditions, to acquire all of
the shares of common stock of TIX not currently owned by Baker Street for a
minimum of $2.10 per share (the "Purchase Price") in cash. The Purchase Price
represented a premium of approximately 56.7% over TIX's closing price of $1.34
on March 30, 2011.
The March 30 Letter invited the Company to conduct a robust, full and fair
sales process. We believe it is incumbent upon the Board to immediately create
a special committee of independent directors to explore all strategic
alternatives. This step would also reduce concerns arising from the inherent
conflict of interest in Mitchell Francis, the Company's Chairman and CEO,
exploring a management-led buyout. We are adamant that any action which the
Board endorses must allow for the realization by shareholders of the Company's
substantial intrinsic value.
We were very disappointed that the Company's response to our non-binding
proposal was to adopt a shareholder rights plan (or poison pill) without
offering any explanation to shareholders and without disclosing either our
offer or any actions the Company may have taken to assist Mr. Francis in
exploring a potential acquisition of the Company. The adoption of the
shareholder rights plan appears to be but the latest in a series of events
undertaken by this Board of Directors (the "Board") to insulate itself from
accountability to the Company's shareholders.
It was our strong preference to continue to communicate privately with the
Company to agree on a course of action in the best interest of all
shareholders, but we feel compelled that all shareholders should understand
the context of our proposal. Accordingly, we are issuing a press release
regarding this letter and the March 30 Letter. We remind you that, as Board
Members of a publicly traded Delaware corporation, it is your fiduciary
responsibility to represent the best interests of all shareholders and we urge
shareholders not to stand idly by if the Board, either through inaction,
cronyism or neglect, fails to act in their best interest. As Warren Buffett
said in his 2003 Annual Letter to Shareholders, " fiduciaries must now decide
whether their job is to work for owners or for managers. " We stand ready to
meet with an independent committee of the Board to discuss our proposal and
the other matters outlined herein.
Very truly yours,
Vadim Perelman
The March 30 Letter (Edit: From Baker Street Capital Management LLC to Tix Corporation)”
Dear Independent Board Members,
Baker Street Capital Management, LLC, together with its affiliates
(collectively, "Baker Street"), is the largest shareholder of Tix Corporation
("TIX" or the "Company"), owning 5,451,259 shares or approximately 21.9% of
the Company's 24,856,893 outstanding shares of common stock. We believe that
the Company is substantially undervalued and that the current market price
does not reflect the Company's true value. We believe the Company should
immediately commence a tender offer to repurchase shares, providing those
shareholders interested with liquidity in cash for their equity in the Company
and for those shareholders who wish to stay for the long term an increased
ownership stake in the Company.
We are deeply troubled by indications we have that it may be management's
intention to take the Company private at a small premium to the current
depressed value, thereby purchasing the Company for less than full value and
short-changing its shareholders. Any proposed transaction to take the Company
private by management without the Company pursuing a robust and full sales
process to all potential purchasers would prevent shareholders from
participating in the realization of the Company's intrinsic value, strong
market position, and growth prospects. Therefore, we hereby set forth our
desire to participate in any sales process and enter into formal discussions
with the Company's Board of Directors (the "Board") or an independent
committee. Further, since we have concerns that management may currently be
seeking to take the Company private, we hereby set forth our non-binding
proposal to acquire all of the shares of common stock of TIX not currently
owned by Baker Street (the "Transaction") for a minimum of $2.10 per share
(the "Purchase Price") in cash. The Purchase Price represents a premium of
approximately 56.7% over TIX's closing price of $1.34 on March 30, 2011. We
are highly confident that with the combination of our existing ownership in
TIX and the financing available to us, the Transaction will be fully financed
upon execution of a definitive agreement. We would be pleased to meet with you
as soon as possible to negotiate the terms of a definitive agreement.
It is our intention to work with management and, following the Transaction, we
expect the Company's senior management team would remain in place and to
maintain the Company's valuable employee base. We also anticipate that we will
continue to run the business substantially in accordance with the Company's
current practice, with such changes as may be necessary to meet the long-term
competitive environment and to realize our business objectives.
We are prepared to immediately commence our due diligence and believe it can
be completed promptly with the Company's cooperation. In connection with
commencing our due diligence we would be willing to enter into a
confidentiality agreement with the Company. Additionally, to the extent our
due diligence reveals a higher value for the Company we are willing to
increase the Purchase Price. However, we do have concerns based on previous
conversations with management that a confidentiality agreement would require
us to enter into an unreasonable standstill to commence due diligence. We hope
the independent directors would acknowledge that any such provision would be
an obstruction designed to favor management and allow a sale of the Company to
management at a discount.
Our proposal is conditioned upon satisfactory completion of limited and
confirmatory due diligence, the waiver of any Company anti-takeover
provisions, obtaining all necessary consents and approvals and the execution
of a mutually acceptable definitive agreement, which would include customary
conditions for a transaction of this type and size.
This letter should not be construed as a binding obligation on us unless and
until a definitive agreement is entered into in a form acceptable to us and we
reserve the right to withdraw, modify or otherwise change our proposal set
forth herein at any time.
We expect that the Board has, or will, form a special committee of independent
directors with respect to management's active and ongoing efforts to take the
Company private. We look forward to working with the special committee as
soon as possible to complete a mutually acceptable transaction that we believe
will benefit everyone involved. As the largest shareholder of TIX we are
committed to ensuring that all shareholders receive full and fair value.
We expect to promptly hear back from you in the next few days to discuss how
we can proceed constructively. We are providing this letter on a private
basis and we hope that discussions regarding the Transaction can be
accomplished on a private basis. If, however, the Board chooses to disregard
its fiduciary obligations and refuses to engage in discussions, pursues a
transaction with management without a full and fair sales process (including
all potentially interested financial and strategic parties), or otherwise
attempts to seek refuge behind defensive corporate roadblocks or machinations,
we are willing to take our proposal directly to the Company's shareholders and
reserve our right to take any and all legal action necessary to preserve
shareholder value.
Very truly yours,
Vadim Perelman
ABOUT BAKER STREET CAPITAL, L.P.
Baker Street Capital, L.P., is a value-focused investment fund modeled after
the partnerships managed by Warren Buffett from 1956 to 1969. Baker Street
Capital, L.P., is headquartered in Los Angeles, California.
CONTACT:
Vadim Perelman, 310-246-0345 , vadim@bakerstreetcapital.com
SOURCE Baker Street Capital, L.P.
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