Lawrence Goldstein, shareholder group urge North Pittsburgh Systems to sell

By Lisa Kerner

Charlotte, N.C., March 23 - A group of North Pittsburgh Systems, Inc. shareholders led by Bulldog Investors, Lawrence J. Goldstein, Santa Monica Partners LP and Monarch Activist Partners LP sent a letter to fellow shareholders citing concern about the "recent deterioration of the business."

"If management continues along its current course, we foresee a continuing decline in our company's value," the investors said in the letter, which was included as part of a schedule 13D filing with the Securities and Exchange Commission.

"At the 2007 annual meeting, shareholders will determine whether North Pittsburgh Systems will continue to plod along as its telephone customers and subscriber base wither away and shareholder value declines or whether to endorse a better alternative, i.e., to sell the company at a premium to the current share price," the shareholder group wrote.

According to the investors, North Pittsburgh Systems is in a similar situation as Warwick Valley Telephone Co. and Hector Communications. Warwick stuck to its business plan and saw its stock fall from $34.00 per share to $17.10 per share since November 2003. Hector Communications, however, put itself up for sale and sold for $36.40 per share in cash, a gain of 160%.

Earlier this week, Goldstein, owner of 130,889 shares, or 2.4%, of Warwick Valley, sent a letter to the company likening its board's current course, with a focus on board resignations and replacements, to "rearranging the deck chairs on the Titanic."

Goldstein pressed for Warwick Valley, like Hector Communications, to sell.

The North Pittsburgh shareholder group beneficially owns 987,791 shares, or 6.58%, of the Gibsonia, Pa., telecommunications company.

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