another interesting article
another interesting article
Investor Group Pressures Stride Rite to Sell Itself
NEW YORK (April 20, 2005) - Investor group Barington Capital sent a letter Tuesday to The Stride Rite Corp. pressing them to consider selling the company.
The group said it was concerned about Stride Rite’s recent stock-option issuances to management, which it believes has devalued the stock held by shareholders.
“We question the appropriateness of the level of wealth that has been transferred to management during a time period when Stride Rite’s stock price has materially underperformed its peer group,” the letter stated. “Under the circumstances, we believe that a sale is the best course to pursue, and therefore advocate that the board promptly consider this and other similar strategic alternatives to maximize shareholder value.”
Stride Rite said it would issue a response later this week. Barington Capital also said it believes that insider selling “at a time when Stride Rite has yet to demonstrate a turnaround of its Keds brand and [a continued focus on firming] up other segments of its business, sends a poor signal to the market concerning management’s view of the company’s long-term prospects.”
Analysts who cover Stride Rite said they had not yet viewed when contacted by FN and could not comment on the matter. Barrington, an investment management firm that primarily sinks money into undervalued small capitalization companies, has previously put investor pressure on both Payless and Steve Madden to take various actions.
Although it would not reveal its actual financial stake in Stride Rite, the investor group claims to be one of its top 10 investors, saying that it controls under 5 percent of the company.
By LYDIA SARGENT
another interesting article
Investor Group Pressures Stride Rite to Sell Itself
NEW YORK (April 20, 2005) - Investor group Barington Capital sent a letter Tuesday to The Stride Rite Corp. pressing them to consider selling the company.
The group said it was concerned about Stride Rite’s recent stock-option issuances to management, which it believes has devalued the stock held by shareholders.
“We question the appropriateness of the level of wealth that has been transferred to management during a time period when Stride Rite’s stock price has materially underperformed its peer group,” the letter stated. “Under the circumstances, we believe that a sale is the best course to pursue, and therefore advocate that the board promptly consider this and other similar strategic alternatives to maximize shareholder value.”
Stride Rite said it would issue a response later this week. Barington Capital also said it believes that insider selling “at a time when Stride Rite has yet to demonstrate a turnaround of its Keds brand and [a continued focus on firming] up other segments of its business, sends a poor signal to the market concerning management’s view of the company’s long-term prospects.”
Analysts who cover Stride Rite said they had not yet viewed when contacted by FN and could not comment on the matter. Barrington, an investment management firm that primarily sinks money into undervalued small capitalization companies, has previously put investor pressure on both Payless and Steve Madden to take various actions.
Although it would not reveal its actual financial stake in Stride Rite, the investor group claims to be one of its top 10 investors, saying that it controls under 5 percent of the company.
By LYDIA SARGENT