Two days after Federal Signal Corp.'s CEO unexpectedly resigned, high-profile investor Ramius Capital Group LLC on Friday launched an activist effort at the Oak Brook, Ill.-based manufacturer of tools, security systems, water blasters and industrial vacuums.
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In a Securities and Exchange Commission filing, Ramius and other investors reported a 7.4% Federal Signal stake and noted that not only are managers “engaged” in discussions with the company’s management and board, but they are also talking to shareholders and other interested groups, including operators of different business units about “potential changes” to improve shareholder value.
For now, that’s it. But Ramius has upped its activist efforts at other companies, and it indicated in the SEC filing that such an approach may be in the cards as well at Federal Signal. “[Ramius] may in the future take such actions with respect to their investment in [Federal Signal] as they deem appropriate including, without limitation, seeking board representation, making proposals … concerning changes to the capitalization, ownership structure or operations,” Ramus and its group wrote in the SEC filing.
Federal Signal, which has a $543 million stock market capitalization, disclosed Wednesday that Robert Welding would retire as CEO effective Jan. 1, after four years in the corner office. Board member James Goodwin, former UAL Corp. CEO, will become interim CEO until a replacement is found.
Ramius has other activist efforts underway, including proxy contests to put directors on the board of restaurant operator Luby’s Inc. and paint and plastics company A. Schulman Inc. — Ron Orol
See Schedule 13D filing from SEC Edgar
See Welding story from the Chicago Tribune
See additional stories about Ramius from Dealscape
Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.
