Barington Capital Pressures TriMas to Review Strategic Options

Strategic Review Urged by Activist Investor

By Svea Herbst-Bayliss

Activist investor Barington Capital Group is advocating that TriMas initiate a comprehensive strategic review, considering various options such as a potential sale of the entire company. The firm argues in a recent letter that engaging a financial adviser should take precedence over the search for a new CEO, especially after the announcement of CEO Thomas Amato's impending departure.

Barington Capital's Stake in TriMas

Barington, based in New York, holds about 1.5% of TriMas, which is headquartered in Bloomfield Hills, Michigan. The hedge fund has intensified its calls for action just days after the news of Amato stepping down. According to Barington's founder, James Mitarotonda, now represents an opportune moment for the TriMas board to evaluate strategic alternatives.

Concerns Over Company Structure

Mitarotonda articulated in his letter to TriMas Chairman Herbert Parker that the current model, which combines packaging, aerospace, and specialty products, is not conducive to driving growth or maintaining shareholder interests. He indicated that this conglomerate structure has been a direct contributor to a declining share price, urging TriMas to contemplate divesting its aerospace and Arrow Engine segments.

Stock Performance Under Scrutiny

As of now, TriMas has a market value nearing $1 billion but has experienced a significant stock decline of 25.5% over the past five years. As of the latest reports, the stock traded around $23.12 on the market. Barington's contention is that under Amato's eight-year tenure, the company overlooked essential portfolio management.

Future Leadership and Strategic Planning

Despite the planned exit of Amato, Barington is wary that the process of hiring a successor might postpone a necessary strategic review and any potential sales moves. The urgency put forth by Barington underscores the growing influence of activist investors, particularly in an environment poised for increased mergers and acquisitions as new leadership emerges at the national level.

Continued Activism and Impact

Barington's activism is not restricted to TriMas alone. Recently, it has also targeted Macy's to drive changes aimed at uplifting share performance and challenged the board at Matthews International. In the context of Matthews, Barington plans to maintain pressure despite the company's announcement to divest a unit, a change that Barington had pushed for.

The Landscape of Activist Investing

The current climate is ripe for activist investors to impose their influence, especially as many seek to create value through strategic restructurings and enhancements. With Barington paving the way, expectations grow for other firms to follow suit in demanding transformational changes within companies underperforming in the market.

Frequently Asked Questions

What does Barington Capital want TriMas to do?

Barington Capital is urging TriMas to conduct a strategic review that includes the possibility of selling the company or its individual units.

Why does Barington Capital oppose hiring a new CEO?

Barington believes that hiring a new CEO would delay the necessary strategic review and potential sale processes that should be prioritized to benefit shareholders.

What is TriMas's market value?

TriMas currently has a market value of just under $1 billion.

How has TriMas's stock performed recently?

TriMas's stock has declined by 25.5% over the past five years, closing at $23.12 recently.

What other companies is Barington Capital involved with?

Barington is also involved with Macy's and Matthews International, pushing for strategic changes in both companies.

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