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Hedge fund Millbrook seeks to split up Unisys

Date: Wednesday, January 9, 2008
Author: Reuters

NEW YORK/BOSTON, Jan 8 (Reuters) - Unisys Corp's third-largest shareholder, hedge fund Millbrook Capital Management Inc, is calling for the technology services company to sell or spin off its U.S. government business, saying that could as much as triple its stock price.
Millbrook, whose MMI Investments LP is Unisys' third-largest shareholder with 34.8 million shares, or 9.9 percent of the outstanding stock, said it sent a letter to the company's board on Monday urging it to hire an independent investment bank to review strategic alternatives.
The review should focus on realizing the potential of the undervalued U.S. government business through a sale, tax-free spin-off or initial public offering, according to a copy of the letter seen by Reuters.
"In our view, the best alternative would be an initial public offering of 19 percent of the shares of a subsidiary of Unisys comprising all of its U.S. government services business," said the letter from Clay Lifflander, president of both Millbrook and MMI.
A spokesman for Unisys declined to comment on the matter. (Reporting by Tiffany Wu in New York and Jim Finkle in Boston; editing by John Wallace)