Chap-Cap ups stake in Entertainment Distribution

By Lisa Kerner

Charlotte, N.C., Oct. 18 - Entertainment Distribution Co., Inc. investors led by Chap-Cap Activist Partners Master Fund, Ltd. bought 368,067 shares of the company's stock between Aug. 20 and Oct. 17 priced from $1.13 to $1.34 each.

The transactions were reported in a schedule 13D filing with the Securities and Exchange Commission.

Chap-Cap and the reporting persons own 8,850,403 shares, or 12.6%, of the New York-based pre-recorded multimedia company's outstanding stock.

The reporting persons may "consider a variety of different alternatives to achieving their goal of maximizing shareholder value, including negotiated transactions, tender offers, proxy contests, consent solicitations, or other actions," the filing stated.

It was previously reported that Chapman Capital rejected company chairman Clarke Bailey's offer of a conference call, calling the gesture "futile" and "redundant" in an Aug. 8 letter to Bailey.

Bailey had refused to meet with the shareholder in person, according to the letter. As a result, Chapman Capital intends to replace directors James Caparro, Cliff O. Bickell and Ramon D. Ardizzone on Entertainment Distribution's board. Caparro is also the company's president and chief executive officer.

At that time, Chapman Capital owned 8,133,312 shares of the company's stock.

Chap-Cap has been in contact with the company several times in the past, including a May 28 letter to Bailey.

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