Central Square Management Urges PICO Holdings Inc (PICO) to Explore Asset Sale Opportunities

In March, Central Square sent a private letter to CEO John Hart and the company’s board, in which it outlined its concerns regarding the company and specific strategies that could be implemented to improve the company’s performance.

In its latest letter, Central Square states that PICO Holdings Inc (NASDAQ:PICO)’s management compensation practices need a significant overhaul. According to the investor, PICO Holdings should conduct a thorough review and overhaul of compensation policies, as shareholders have rejected PICO’s compensation policies twice in the last five years.

Moreover, Central Square wants PICO Holdings Inc (NASDAQ:PICO) to conduct a formal sale process of UCP Inc (NYSE:UCP), a publicly-held homebuilder operating in California, Washingt Tennessee and the Carolinas. In June, Central Square disclosed upping its stake in UCP Inc (NYSE:UCP) to 409,139 Class A shares.

According to Central Square, PICO Holdings Inc (NASDAQ:PICO) should use the entire amount of the proceeds from a UCP sale and the $10 million of excess cash from the Northstar sale in an issuer self-tender, which will provide liquidity to shareholders. Furthermore, Central Square urged the chair to assign shareholders’ representatives on the company’s board of directors.

Concluding its letter, Central Square said that it is interested to work constructively with members of the PICO Holdings Inc. (PICO)’s board and management “to implement meaningful steps to enhance shareholder value at the company.”

“We remind you that the board’s duties are to PICO shareholders. We look forward to continuing our discussions on ways to unlock significant value for all.”

Other large shareholders of PICO Holdings Inc (NASDAQ:PICO) among the investors we track, include Chuck Royce’s Royce & Associates, and Jim Tarantino and Chris Galvin’s Westerly Capital Management, owning 2.04 million and 98,918 shares, respectively, as of the end of March.

Disclosure: none