Angelica responds to Pirate's demands, provides name of investment banking firm

By Lisa Kerner

Charlotte, N.C., July 17 - Angelica Corp.'s board of directors responded to Pirate Capital LLC's demand that the company retain an investment banking firm to explore strategic alternatives.

The letter to Pirate manager Thomas R. Hudson, Jr., was included in a form 8-K filing with the Securities and Exchange Commission.

According to the letter signed by chairman Stephen M. O'Hara, Angelica has engaged Morgan Joseph & Co. since Feb. 21, 2006 to assist in the review of alternatives. The board agreed to retain the company through June 30, 2008.

Angelica said it will consider submitting a request for a no-action letter from the SEC concurring with its view that the shareholder's proposal may be omitted from the 2007 proxy statement if it is not voluntarily withdrawn.

As previously reported, Pirate's July 12 letter to the board reiterated its demand that the board "promptly retain the services of a nationally recognized investment banking firm for the purpose of effecting a sale of the company, through sales of assets, an extraordinary transaction or otherwise, and to publicly identify the investment banking firm and its mandate."

The investor said if its demands are not met, it plans to nominate one or more persons to Angelica's board.

On July 2, Pirate Capital sold 150,000 shares of the company's stock for a total of $3.16 million and also called on the board at that time to hire an investment bank to advise Angelica on strategic alternatives. The activist hedge fund also said it would put a proposal to the company's annual meeting of shareholders recommending that the board take the same step.

Pirate currently owns 935,147 shares, or 9.8%, of Angelica's outstanding stock.

Angelica is a Chesterfield, Mo.-based provider of textile rental and linen management services principally to the health care industry.

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