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Versant Corp. Message Board

  • agatesystems agatesystems Sep 23, 2011 1:26 PM Flag

    Activist letter

    http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7827020

    Excerpt:

    we think the board should consider a one-time special dividend if the Company continues to add cash to its balance sheet after the continuation of the share-buyback program and properly implemented dividend program....

    Based on this we feel the Board of Directors should announce a new and continuing share-buyback program of $5 million as well as an ongoing annual dividend per share of at least $0.60.

    Value as Stand-Alone Entity. We continue to question why Versant is a public company as it has little need to access public markets and annual public company costs are equal to AT LEAST 10% of the Company’s current enterprise value. Using a conservative view of free cash flow of $2.5 million, we believe Versant’s stock price is tremendously undervalued as the business should be worth over $8.50 a share ex-cash as opposed to the current $3.55 a share ex-cash at which the Company is currently trading. Further, this valuation does not include the optionality or benefits Versant would realize by selling itself to a strategic buyer that could potentially better monetize the company’s NOL’s as well as strip out public company costs which drain approximately 1/3 of the Company’s annual free cash flow. A strategic buyer should be willing to pay a substantial premium to the current share price. While we as shareholders are willing show some patience to garner the appropriate value per share, it is clear to us that Versant has little reason to continue as a stand-alone business in the public markets and would be better served by selling itself to a larger platform or by going private and stripping out exorbitant public company costs.

    As a final but important note, we think it is appropriate for Jochen Witte to not stand for re-election to the board...

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