There’s been a lot of speculation about Aeropostale lately, with institutional investors swooping in to try to right the troubled teen retailer. Last week, hedge fund Hirzel Capital Management disclosed that it now owned 5.7% of the teen retailer’s outstanding shares when it filed this 13G. Earlier this week, it followed up with this 13D, upping its stake to 6% and signalling that a passive investment had very quickly turned to an active one.
Though the language in the 13D was pretty boilerplate, some news outlets quickly ratcheted up the speculation by highlighting the fact that the filing noted that Hirzel “may engage in communications with one or more shareholders of the Issuer, one or more officers of the Issuer and/or one or more members of the board of directors of the Issuer.” Just to put that into perspective, we counted over 350 13Ds that had similar language to that in the past year.
And then, yesterday, came this news release from another institutional investor, Crescendo Partners. While the letter didn’t disclose Crescendo’s stake, it described it as “significant” and said that it believed the shares were worth $14 to $16 a share, compared with the just over $10 that Aeropostale is currently trading at. We’ve yet to see a 13D or 13G from Crescendo and it’s not clear from their letter if their “significant stake” will require them to file one.
Both of these, of course, follow this 13D filed in mid-September by Hummingbird LLC, which disclosed a nearly 8% stake in Aeropostale. A month later, Hummingbird filed this amended 13D, which showed their holdings steady at 7.96%.
Any journalist will tell you that three of anything makes a trend. Which is probably what prompted the attorneys at Aeropostale to spring into action and file this change in control severance plan for it executives. While the filing notes that the company’s Compensation Committee adopted the plan on Nov. 12, it’s hard to see it as anything but a response to recent events.
Under the new plan, which covers all of the company’s named executives with the exception of CEO Tom Johnson plus an unknown number of other executives, those executives would get 24 months of pay, plus any earned, but unpaid bonus.
We looked through Aeropostale’s prior filings and couldn’t find a similar plan in the past, which makes it hard to chalk up this week’s filing to a mere coincidence.
One of our rules here at footnoted is that there are no accidents in SEC filings. Everything is there for a reason.