DTM copycats at it again

These posts are just so tedious to write. Regular readers will recall a blog written about ATS last November (see prior post “ATS shareholders find their tonic“, November 21-07). That post highlighted the role that Eric Rosenfeld and Colin Watson played at Spar Aerospace in the 90s. Seeking Alpha picked it up and generated a lot of traffic; the post featured this passage:

Hedge funds (back when the phrase was a novelty) were involved there as well, just as with ATS. This was Canada’s first look at Crooner Eric Rosenfeld, now quite in/famous for his activist investing under the Crescendo brand.

Yesterday, in a display of subconscious acknowledgement that there are few good story ideas that haven’t already been written by someone else, Ms. McNemesis (of my favourite DTM publication) ran a newsflash type of story about Mr. Rosenfeld under the following headline:

“Crooner in the board room”

Now, the print media have previously delved into our friend Rosenfeld’s quaint cum odd singing predilection. None other than The New York Times did a piece in 2005 about the time that Mr. Rosenfeld rattled off three tunes in front of 500 attendees at an institutional investor conference; each song received less applause than the prior one as the audience concluded, perhaps, that they didn’t want to encourage him to keep going. The headline of that snippet was perfect:

“He Sings, He Dances, but He Will Not Stop”

I confess to writing about the fellow more than once (see prior post “Saavas, keep your chin up!“, January 31-08). Invariably it is to correct the record, or soothe the nerves of CEOs under attack.

The classic challenge when it comes to dealing with activist investing in the Canadian capital markets is the rewriting of history that takes place from time to time. The prime example is when Crescendo takes credit for the work that Charles S. Jones did as CEO of Geac (GAC:TSX) earlier this decade. After Mr. Jones stepped in and took the company from near bankruptcy to $10 a share, Crescendo (Rosenfeld’s firm) started buying stock. Unbeknownst to Mr. Rosenfeld when he fortuitously started buying Geac shares, Geac had already been looking at a sale in February 2005. Investment Bankers at Bear Stearns in New York were engaged in April 2005 to work out an M&A deal with the right buyer of the business — an engagement that ultimately led to the $1 billion sale of Geac to Infor a couple of years ago. All of these details were outlined in the Director’s Circular published by Geac on December 16, 2005.

Mr. Rosenfeld initiated his firebomb proxy strategy in August 2005, long after the private negotiations with Infor were about to morph into a deal. A few weeks after going public with his hollow complaints about the fact that Geac management had only been able to grow the stock by 400% over a four year period, Mr. Rosenfeld hears the good news along with the rest of the shareholder base: Geac’s being taken out for $12.70/share!

Brilliant work, Eric! Those activist hedge funds sure know how to add value!

In the piece yesterday, the DTM journalist refers to Geac as a “slowpoke” prior to Mr. Rosenfeld’s arrival. 400% share price appreciation over four years — all before Crescendo throws a public hissy fit. Some slowpoke.

You might need to licence to own a cat or dog in Toronto, but you sure don’t need a licence to write uninformed, copycat stories for the business pages of the DTM.

MRM