Baker Street Says Xyratex (XRTX) Should Explore Alternatives

January 14, 2013 6:22 AM EST Send to a Friend
Baker Street Capital Management, LLC (together with its affiliates, "Baker Street"), the largest shareholder of Xyratex Ltd (Nasdaq: XRTX) with ownership of approximately 23% of the Company's outstanding common shares, today announced that it delivered a letter to the Board of Directors of the Company (the "Board").

In the letter, Baker Street stated its belief that Xyratex' current market price is dramatically lower than the Company's intrinsic value. Baker Street believes this valuation discrepancy is largely due to the flawed strategy of reinvesting substantial profits from the Company's mature core businesses in loss-making and unproven HPC and Cloud initiatives. Baker Street stressed that a fair and thorough review of all strategic alternatives available to the Company should be undertaken by a significantly reconfigured Board to maximize shareholder value. The letter highlighted the need for urgent Board change and stated that Baker Street has identified three highly-qualified independent candidates that it believes should be immediately added to the Board. Baker Street concluded that it hopes to work constructively with the Board and management to explore ways to unlock value at Xyratex for the benefit of all shareholders.

For the full letter, click here.


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