Investment fund Chapman Capital has disclosed a 9.3% stake in e-trading operation eSpeed and called for a formal split from interdealer broker Cantor Fitzgerald.
Chapman Capital, a Los Angeles-based investment advisor focusing on takeover and turnaround investing, is demanding that eSpeed's board of directors "maximise shareholder value via a change-of-control transaction".
The fund is calling for the conversion of eSpeed Class B common shares to Class A stock in order to eliminate "potential conflicts of interest" that may exist due to cross-management roles between eSpeed, BGC Partners, and Cantor Fitzgerald.
Robert Chapman, managing member of Chapman Capital, says: "Particularly in light of eSpeed's February 13, 2007 disclosure regarding its weak 2007 financial outlook and incongruous granting of free stock options representing nearly 3% of the outstanding Class A common shares to the executive most responsible for such operating underperformance, Mr. Howard W. Lutnick, the company's ownership base has conveyed a nearly uniform desire for eSpeed's Class A shares to be maximised through a change-of-control transaction."
The firm has filed a statement with the SEC detailing the circumstances and background underlying its demands. ESpeed has yet to formally respond.
Over the past eleven years, Chapman Capital has agitated successfully for the restructuring or sale of over twenty publicly-traded companies, including a recently closed transaction involving Glenayre Technologies, Inc. and pending transactions involving Carreker Corporation and Sunterra Corporation.