SBS Shareholders Up Pressure On AlarcÃ³n
April 9, 2008 at 1:24 PM (PT)
A disgruntled shareholder of SPANISH BROADCASTING SYSTEM is rallying other stockholders to pressure the company to make major strategic changes in view of its dismal stock price, reports THE MIAMI HERALD. In a second letter to the radio company's board of directors, DISCOVERY GROUP said numerous stockholders have contacted the CHICAGO-based equity firm since it filed its first letter pressing for changes on FEBRUARY 29th.
"These shareholders have expressed overwhelming support for our recommendation that the board of directors form a special committee, hire a nationally-recognized investment bank and evaluate the three alternatives we outlined in our letter," wrote DISCOVERY GROUP Managing Member DANIEL J. O'DONOGHUE.
The three alternatives are for management to sell SBS, take it private or adopt a more modern corporate governance structure that would dilute Chairman/Pres./CEO RAÚL ALARCÓN JR.'s power.
ALARCÓN gave a muted response at the company's first-quarter earnings call, saying only that "the board will properly consider all alternatives in due course." The company had no comment about the second letter.