Earlier this week we reported that activist investor Jeff Smith’s Starboard Value revealed a 12.4% position in Brink’s Company (NYSE:BCO), which includes 4.57 million shares owned directly and 1.45 million shares beneficially owned as part of a cash-settled total return swap agreement with Société Générale. Smith also sent a letter to the company on October 5th and said the following:
“We appreciated the opportunity to meet with you and several other members of the Board of Directors (the “Board”) last week, as well as our interactions with you and Joe over the past several months. As you know, Starboard Value LP, together with its affiliates (“Starboard”), is the Company’s largest shareholder and, after our recent increase, owns approximately 12.4% of the common stock and equivalents of The Brink’s Company (“Brink’s” or the “Company”). As a follow up to our meeting, we thought it would make sense to outline our views for the benefit of the full Board as well as our fellow shareholders regarding opportunities to create value at Brink’s. We hope that this letter is helpful in addressing some of the questions that you asked during our meeting while also further demonstrating the compelling opportunity at Brink’s.
We believe that significant opportunities exist to create value for shareholders based on actions within the control of management and the Board. Unfortunately, despite announcing a number of strategy shifts, personnel changes, and restructurings over the past five years, Brink’s has not capitalized on those opportunities but has instead, as we discussed with you at our recent meeting and as we detail below, repeatedly disappointed investors and underperformed its peers.
Last week, you asked us what shareholders will be looking to hear at Brink’s upcoming analyst day. First, management must be able to outline a credible turnaround plan with detailed financial metrics that will bring Brink’s performance in-line with its best-in-class peers in a reasonable time frame. However, success requires not only sound strategy, but also solid execution. As such, rather than simply hearing about another set of new targets, shareholders will instead be looking for management to demonstrate why the outcome will be different this time versus the prior failed turnaround attempts. We do not believe that shareholders will tolerate further missteps and delays.”
The rest of Starboard’s letter can be downloaded below:
From Starboard’s letter we understand that BCO’s management asked Starboard what to talk about at Brink’s upcoming analyst day. Below is Brink’s 89 page presentation which tries to address some of the points raised by Starboard: