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Hedge-Fund Manager Eyes Bisys Board Seat

Last November, Bisys agreed to pay $25.1 million to settle a Securities and Exchange Commission investigation into previous restatements.
Stephen Taub, CFO.com | US
March 27, 2007

Outsourcing services provider Bisys Group disclosed that hedge-fund manager Ahmet Okumus has requested a seat on the board.

The president of New York-based Okumus Capital and owner of 10.41 percent of the company's shares, Okumus stated in a letter to Bisys that he has "the utmost confidence in the ability and intentions of the current board and management."

Even so, Okumus added, he hopes to "provide the board with practical insight and guidance in considering the company's strategic alternatives. Â… "I strongly feel that my experience in identifying undervalued assets, along with my knowledge of financial engineering and capital allocation can make an immediate positive impact to the board during this critical period," he added.

The company's share price fell nearly 50 percent between April and August 2006, reported the Associated Press, after Bisys announced the resignation of its CEO and warned of an earnings miss for fiscal 2007. The share price rebounded, then fell again last month after the company announced its second-quarter earnings, according to the wire service.

And last November, Bisys agreed to pay $25.1 million to settle a Securities and Exchange Commission investigation into previous restatements.

Although a growing number of hedge fund have recently been taking an increasing number of activist positions in public companies, this appears to be new territory for Okumus, a firm that was founded in 1997 and currently runs more than $800 million.

At the end of last year, the fund had $413 million invested in just six companies: Bisys, Wal-Mart, Expedia, Arbitron, Affiliated Computer Services, and First Data. According to the firm, it focuses on identifying undervalued companies that are in a good business, with steady cash flow and a high return on invested capital.




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