Two investors urge career Website company DHI to go on the block

Reuters News
Posted: Jun 15, 2015 1:19 PM

By Svea Herbst-Bayliss

BOSTON (Reuters) - Two activist investors on Monday urged DHI Group Inc, which offers specialized career websites, to sell itself and said they have already spoken with potentially interested buyers.

Barington Capital Group LP and Ancora Advisors LLC said DHI, formerly Dice Holdings, is lagging behind its peers but could perform better under new management.

"A sale of the company to a strategic or a private equity buyer is the best way to maximize value for all shareholders," Barington's James Mitarotonda and Ancora's Fred DiSanto wrote to DHI Board Chairman Peter Ezersky in a letter dated June 15.

"Our discussions with potential strategic and private equity buyers indicate that there are likely to be numerous parties interested in acquiring DHI at a premium to the company's current stock price," the pair added in the letter, declining to comment further on the potential buyers.

The company was not immediately available to comment.

DHI's share price, trading at $9, fell 1.31 percent on Monday as the broader stock market was also lower. Since January, DHI has lost roughly 10 percent of its value.

Barington and Ancora are working together in pushing for change and said they jointly own about 4 percent of DHI's stock. Other large investors include Sterling Capital Management LLC, Oak Ridge Investments LLC, Dimensional Fund Advisors LP and ClearBridge LLC. DHI plans to host an investor day on Tuesday.

The two investors said the company's technology and engineering site does not offer substantive job postings from Google, Uber or Facebook and is under-represented in the high-growth Silicon Valley market.

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The investors also said DHI's $186 million in stock buybacks failed to boost the share price.

"We believe the ineffectiveness of stock buybacks to create value for shareholders is primarily due to management's inability to capitalize on opportunities for organic growth," the letter said.

Barington has returned roughly 12 percent his year, beating the average hedge fund's 5 percent return.

(Reporting by Svea Herbst-Bayliss; Editing by Alan Crosby)