Activists agitate for more

Sarasota executive Gregory Yull received the kind of letter recently no CEO wants to get, much less be widely distributed to the public.

In another sign shareholder activists are getting bolder in their public criticisms of executives, FrontFour Capital and Zelman Capital teamed up to write a public letter to Yull, the CEO of Intertape Polymer Group.

Headquartered in Quebec and Sarasota, Intertape manufactures tapes, film and packaging for industrial and retail use. The company's stock is publicly traded in Canada and it has 2,000 employees in 17 locations, including 12 manufacturing facilities in the United States.

Together, Front Four and Zelman own 6.5% of Intertape shares. The private equity funds say they believe the company's shares should trade at 52% higher than the recent price.

“While we acknowledge that IPG's operations and financial position have significantly improved over the last five years, the company's shares now trade at a significant 'management discount' and the stock has become a 'show-me' story,” the letter reads. “This dynamic exists due to recent company missteps, including the downward revision of fourth quarter 2014 earnings stemming from manufacturing issues and the more recent delay of full production by 12 months at the Blythewood, S.C., tape production facility.”

The private equity funds drop several requests on Intertape. The list includes: the firm should boost debt to repurchase additional shares, improve disclosure of capital expenditures, pursue a listing on a U.S. stock exchange and add independent packaging experts to the board of directors.

The letter got Yull's attention.

Intertape issued a press release in response to the shareholder activists with a comment from Yull saying the company has “clearly demonstrated” attention to enhancing shareholder value by repurchasing millions of shares and paying dividends. “The board will continue to exercise its fiduciary duty by actively working to create long-term shareholder value and remains open to constructive discussions with all of our shareholders,” the response says.