BOSTON, June 20 /PRNewswire/ -- The following is a letter from Warren J. Isabelle of Ironwood Investment Management, LLC to shareholders of Danka Business Services (OTC:DANKY) Fellow Danka Shareholders: Danka Business Services PLC ("Danka") has recently submitted an amendment to its proxy statement for the upcoming meeting of shareholders to be held June 27, 2008, with two new proposals (Proposals 1A and 1B) that together would decouple the sale of its U.S. operating subsidiary, Danka Office Imaging Corporation (DOIC), to Konica-Minolta Business Solutions U.S.A., Inc. (Proposal 1) from the voluntary liquidation process (Proposal 2). In their preamble, management suggests that certain ADS (American Depositary Share) holders have expressed support for the sale as partial rationale for the change. As the largest Danka ADS holder, Ironwood cannot accept that statement without qualification. While the gross proceeds, anticipated between $240 million and $250 million, would not appear, on its face, to be an unreasonable price for DOIC, the proposed distribution of the proceeds, we believe, is unreasonable and therefore not in the best interests of shareholders. Furthermore, since the most recent financial statements available date back to December 31, 2007, we have no idea as to whether or how much excess cash flow is being generated that could be applied to existing liabilities, thereby reducing them and thus increasing, perhaps significantly, the proceeds available for distribution.
Finally, we remain deeply concerned that shareholders may not have enough time to develop a sufficient understanding of the proposed transactions or the new proposal amendments and to cast their vote in a timely fashion. The voting deadline has been extended until June 25th, but Danka still intends to hold the special meeting of shareholders on June 27, 2008 as originally planned, with no additional financial disclosure from the Company. The only benefit we perceive from these proposal amendments is the additional time provided to ADS shareholders to vote their proxies.
Given these development and our concerns, we again urge all Danka shareholders of record, and specifically Danka ADS shareholders, to read carefully the proposal amendments and exercise your right to vote on them. We must reiterate that Ironwood will be voting against the voluntary liquidation. Quite simply we remain unconvinced: We continue to believe that management has not acted in the ordinary shareholders' best interests and that the liquidation process will not result in maximizing the value of those shares. DATASOURCE: Ironwood Investment Management, LLC CONTACT: David Eaton of Ironwood Investment Management, LLC, +1-617-757-7600 Web site: http://www.investmentmanagement.com/
|