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Wynnefield Target And Strategic Alternatives

The Wynnefield Capital target, Omega Protein (NYSE: OME), isn’t catching a the big break Wynnefield was looking for since the announcement that it’s exploring strategic alternatives.

Wynnefield got involved back in August and shares are up only 5% since then. Last week, the company announced it was in the process of a review of strategic alternatives to enhance shareholder value, including a possible share repurchase program, sale, merger, spin-off or other separation of a selected business or other form of business combination or strategic transaction.

The small activist fund sent a letter to Omega [full letter here] just before that, saying the it has “never observed a more glaring case of ‘diworsification’ than the risky and unsuccessful efforts of Omega Protein Corporation to enter the human nutrition field”. The hedge fund believes that the company’s actions have “flushed away” $150 million in shareholder value through a tragic and risky misallocation of shareholder equity over the years.

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