Pirate Capital sells 150,000 Angelica shares, asks directors to examine strategic alternatives

New York, July 2 - Angelica Corp. shareholder Pirate Capital LLC sold 150,000 shares for a total of $3.16 million and also called on the board of directors to hire an investment bank to advise on strategic alternatives.

The activist hedge fund said it would also put a proposal to the company's annual meeting of shareholders recommending that the board take the same step.

Following the most recent transactions, Pirate owns 935,147 shares or 9.8% of the total, according to a schedule 13D/A filing with the Securities and Exchange Commission.

The sales took place from June 5 to June 27 at prices of $20.29 to $25.06.

Pirate previously reported on May 25 selling 130,000 shares for $3.36 million.

In its letter to the company, Pirate claimed that Angelica's management had failed to improve growth.

"More importantly, we don't believe management has laid out for shareholders a cogent roadmap of how to achieve its targets," Thomas Hudson, manager of the fund, wrote.

He added: "Because of the paucity of success in generating results and what we believe to be a lack of a clearly articulated vision by management for delivery of the necessary organic growth, we ask that you, the board of directors, immediately implement appropriate strategic initiatives. Specifically, we, as a substantial holder of Angelica stock, demand that the company engage a nationally recognized investment banking firm to explore all strategic alternatives to increase shareholder value, including, but not limited to, the sale of the company, sales of assets, or another extraordinary transaction, and that the board of directors publicly identify the investment banking firm and its mandate."

Pirate warned that if an investment bank is not hired it may nominate its own slate of directors for election at the annual shareholders' meeting.

Angelica is a Chesterfield, Mo.-based provider of textile rental and linen management services principally to the health care industry.

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