Reuters – Lamson & Sessions Co. is facing pressure from hedge fund Ramius Capital Group, which wants the manufactured plastics goods maker to sell one of three divisions, according to aregulatory filing on Tuesday.
Ramius, a $7.4 billion fund group that holds a 5.9 percent stake in the Cleveland-based company, said its stock is “significantly undervalued,” according to a Dec. 4 Ramius letter to the company in a filing with the U.S. Securities and Exchange Commission.
To remedy this, Ramius said Lamson & Sessions should sell its “extremely volatile” PVC Pipe business, which it valued at between $35 million and $70 million, and either put the proceeds into its other businesses or return it to shareholders.
Ramius noted that Lamson & Sessions recently increased the size of its credit facility to $300 million from $125 million and will seek shareholder approval to increase its share capital to 40 million from 20 million shares to pursue acquisitions.”
“We believe that the company’s current strategy is somewhat backward. Lamson & Sessions should not be making any acquisitions at this time,” said Ramius
