In Rare Move, Van Den Berg Goes Activist On Layne Christensen

In a rare move, Arnold Van Den Berg of Century Management has filed an intent to push for reorganization at the Layne Christensen Company (NASDAQ:LAYN). The filing with the Securities and Exchange Commission indicates that the form holds a 16.2% stake in the company, which offers drilling services.

Van Den Berg appeals to Layne Christensen management

The filing also states that Van Den Berg gave a presentation to management at Layne and a group of the company’s board members earlier this month. The firm suggested that they consider reorganizing the company’s business. It called for each of the company’s business segments to be evaluated and possibly divesting one of those segments.

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According to the filing, the proceeds from that divestment could help pay down some of the company’s debt and also begin buying back shares. Van Den Berg believes these actions would enhance value for Layne’s shareholders. The firm added in that filing that it might continue to discuss strategic options with Layne Christensen management.

Data from FactSet indicates that Van Den Berg is currently Layne’s biggest shareholder. Previously, the firm reported its stake on a form used by passive investors, according to The Wall Street Journal. Today’s regulatory filing is the first one on the forms used for activist investing.

Layne pressured by investors

Lately Layne Christensen Company (NASDAQ:LAYN) has been struggling with continued declines in its exploration activities. The company said two months ago that it was working to cut costs. Among the actions it said it was taking is reviewing operations and assets that are underperforming. The company said it is aiming to improving its operating results. In the most recently completed quarter, Layne posted a widening loss.

In addition, the company is currently undergoing a transition in management. CEO Rene J. Robichaud resigned in June. Layne Christensen’s board, along with Robichaud himself, decided to make the leadership transition. Non-executive board chairman David A.B. Brown has taken over extra responsibilities to cover for Robichaud’s departure.