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Shamrock Holdings, a Burbank, Calif., fund controlled by the family of Roy Disney, nephew of Walt, said in an SEC filing last week that its Shamrock Activist Value Fund had acquired more than 2.6 million shares of eResearch, making it a major shareholder. Shamrock described the shares as "an attractive investment opportunity." No further details were provided in the filing about its intentions, and a Shamock spokesman didn't respond to our phone message. eResearch Chief Financial Officer Richard Baron declined to comment to PhillyInc.
Chances are Shamrock won't be quiet for long. Activist investors such as billionaire Carl Icahn buy stock in what they consider undervalued companies, then press management to make changes, such as laying off workers or selling businesses to boost the value of the shares. According to an old but good summary by Bloomberg News, Roy Disney has a long track record of trying to shake up companies, including a failed hostile bid for Polaroid Cop. in the 1980s and a $100 million investment in trendy sneaker L.A. Gear Inc., two companies which later filed for Chapter 11 bankruptcy protection. And don't forget, Roy was partially responsible for the ouster of Michael Eisner as chief executive of the media company that his uncle Walt founded. Recall that his showdown with Eisner found its legs after a strong showing against Eisner during Disney's 2004 annual meeting ($ required) at the Pennsyvlania Convention Center in 2004.
Shamrock isn't shy about letting companies know where they've gone wrong. In its filing, Shamrock says: "We are not passive investors, and we have a long and established tradition and culture that respects all stakeholders -- owners, employees, customers and the community." Earlier this week, Shamrock demanded that NuCo2 Inc., (NASDAQ: NUCO), a supplier of bulk carbon dioxide, institute a special dividend. Shamrock also complained that $1.1 billion offer for packaged ice make Reddy Freeze Inc. (NYSE: FRZ) was too low.
What Shamrock's gripe is with eResearch isn't clear. Shares of eResearch have been on a tear lately, soaring more than 28 percent over the past three months. Last week, the company reported second-quarter net income of $4.1 million, or 8 cents per share, a gain of 147 percent from $1.7 million, or 3 cents, a year earlier. Revenue rose 8.4 percent to $24.7 million. eResearch also said it expected net income this year to be at the "high end" of its guidance of 25 cents to 30 cents per share. Analyst George Hill at Leerink Swann & Co. initiated coverage of the company last Friday with a rating of market perform. He couldn't be reached for comment.
