Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D/A
(Amendment
No. 1)
Under
the
Securities Exchange Act of 1934
Federal
Signal Corporation
(Name
of
Issuer)
Common
Stock, $1.00 par value
(Title
of
Class of Securities)
313855108
(CUSIP
Number)
Warren
B.
Kanders
c/o
Kanders & Company, Inc.
One
Landmark Square, 22nd
Floor
Stamford,
CT
06901
Copy
to:
Robert
L.
Lawrence, Esq.
Kane
Kessler, P.C.
1350
Avenue of the Americas
New
York,
NY 10019
212-541-6222
(Name,
Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July
9,
2008
(Date
of
Event which requires Filing of this Statement)
If
the
filing person has previously filed a statement on Schedule 13G to report the
acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box
____________________
The
information required on the remainder of this cover page shall not be deemed
to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP
No. 313855108
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13D
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Page
2 of
6 Pages
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NAMES OF REPORTING PERSONS:
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Warren
B. Kanders
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I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS
(ENTITIES ONLY):
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CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP
(SEE INSTRUCTIONS):
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(a) o |
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(b) o |
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SEC USE ONLY: |
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SOURCE OF FUNDS (SEE INSTRUCTIONS): |
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PF |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS
IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): |
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o |
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CITIZENSHIP OR PLACE OF ORGANIZATION: |
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United States |
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7 |
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SOLE VOTING POWER: |
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| NUMBER OF |
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2,855,954
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| SHARES |
8 |
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SHARED VOTING POWER: |
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| OWNED BY |
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0 |
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| EACH |
9 |
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SOLE DISPOSITIVE POWER: |
| REPORTING |
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| PERSON |
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| WITH |
10 |
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SHARED DISPOSITIVE POWER: |
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0 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH
REPORTING PERSON: |
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CHECK IF THE AGGREGATE AMOUNT IN
ROW
(11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS): |
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o |
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PERCENT OF CLASS REPRESENTED BY AMOUNT
IN ROW
(11): |
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5.95% |
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TYPE OF REPORTING PERSON (SEE
INSTRUCTIONS): |
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IN |
*SEE
INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP
No. 313855108
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13D
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Page 3
of
6 Pages
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This
Amendment No. 1 (the “Amendment”) amends the Statement of Beneficial
Ownership on Schedule 13D originally filed with the Securities and Exchange
Commission on June 30, 2008 (the “Schedule 13D”) by the Reporting Person with
respect to shares of common stock, par value $1.00 (the “Common Shares”) of
Federal Signal Corporation (the “Issuer”), whose principal executive offices are
located at 1415 West 22nd
Street,
Oak Brook, Illinois 60523. Unless specifically amended hereby, the disclosures
set forth in the Schedule 13D shall remain unchanged. Capitalized terms used
but
not otherwise defined herein shall have the meanings set forth in the Schedule
13D.
Item
4. Purpose of Transaction.
Item
4 of
the Schedule 13D is hereby amended by the addition of the
following:
On
July
9, 2008, the Reporting Person sent a letter to the Issuer’s Board of Directors
stating that BMO Capital Markets Corp.’s (“BMO”) downgrade of the Issuer to
“underperform” gave the Board even more reason to carefully consider its
selection of the next Chief Executive Officer.
In
its
report, BMO lowered its 2009 price target of the Issuer’s stock from $13 per
share to $10 and expressed its belief that the Issuer’s current valuation was
not warranted.
As
the
Reporting Person is the only candidate for the CEO position whose name has
been
publicly announced, he observed that “it is possible to conclude that [the
Issuer's] share price has been supported by my reputation, my purchases of
[the
Issuer's] stock which have been publicly disclosed, as well as purchases
by some
of [the Issuer's] largest shareholders, who I have been informed, actively
endorse my candidacy.”
The
Reporting Person further expressed his belief that the Issuer’s “future
valuation will depend on [the Issuer's] ability to generate growth organically
and through targeted acquisitions if the price of its shares is to maintain
its
premium to its peers and achieve higher than anticipated multiples - areas
in
which I have achieved demonstrable success.”
“I
therefore find it difficult to believe that the Board is so naïve as to base its
selection of a CEO on personality tests, rather than a careful evaluation
of a
candidate’s history of proven performance and delivery of shareholder
value.”
The
Reporting Person advised the Board that, although they had not responded
to his
prior offers to meet with the Board personally, he remained “keenly interested”
in the CEO position and intended to continue to purchase shares of the Issuer
as
circumstances dictated.
A
copy of
the letter is annexed hereto as Exhibit J.
On
July
10, 2008, the Reporting Person issued a press release highlighting the
contents of the letter he sent to the Issuer’s Board of Directors on July
9, 2008.
A
copy of
the press release is annexed hereto as Exhibit 99.1.
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CUSIP
No. 313855108
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13D
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Page 4
of
6 Pages
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Other
than as set forth in this Item 4, the Reporting Person does not have any current
plans, proposals or negotiations that relate to or would result in any of the
matters referred to in paragraphs (a) through (j) of Item 4 of the Statement.
The Reporting Person intends to review his investment in the Issuer on a
continuing basis, and to the extent permitted by law, may seek to engage in
discussions with other stockholders and/or with management and the Board of
the
Issuer concerning the business, operations or future plans of the Issuer.
Depending on various factors including, without limitation, the Issuer's
financial position, the price levels of the Common Stock, conditions in the
securities markets and general economic and industry conditions, the Reporting
Person may, in the future, take such actions with respect to his investment
in
the Issuer as he deems appropriate including, without limitation, purchasing
additional Common Stock, selling Common Stock, engaging in short selling of
or
any hedging or similar transaction with respect to the Common Stock, taking
any
action to change the composition of the Board, taking any other action with
respect to the Issuer or any of its securities in any manner permitted by law
or
changing its intention with respect to any and all matters referred to in
paragraphs (a) through (j) of Item 4.
Any
description herein of the above referenced letter and press release are
qualified in their entirety by reference to the attached Exhibits.
Item
5. Interest in Securities of the Issuer.
Item 5
of the Schedule 13D is hereby amended and restated in its entirety to read
as
follows:
(a),
(b)
and (c). As of July 9, 2008, the Reporting Person may be deemed to be the
beneficial owner (as that term is defined under Rule 13d-3 under the Exchange
Act of 1934, as amended) of 2,855,954 shares of Common Stock, constituting
approximately 5.95% of the outstanding shares of Common Stock (the percentage
of
shares owned being based upon 47,997,478 Common Shares outstanding as of April
13, 2008, as set forth in the Issuer’s most recent report on Form 10-Q for the
period ended March 31, 2008, filed with the Securities and Exchange Commission
on May 2, 2008), over which the Reporting Person exercises sole voting and
dispositive power.
No
transactions in the shares of Common Stock have been effected by the Reporting
Person during the last 60 days except the following transactions, each of which
was made by the Reporting Person in a broker’s transaction in the open market.
Prices do not include brokerage commissions.
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Date
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Number
of Shares
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Price
Per Share
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| July 9,
2008 |
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100,000 |
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$11.967
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| June
27, 2008 |
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125,000 |
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$12.418
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| June
26, 2008 |
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137,600 |
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$12.725
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| June
26, 2008 |
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32,300 |
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$12.770
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| June
25, 2008 |
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7,835 |
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$13.897
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June
24, 2008
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87,265
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$13.883
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May
23, 2008
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15,000
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$12.600
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(d)
and
(e). Not Applicable
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CUSIP
No. 313855108
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13D
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Page 5
of
6 Pages
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Item
7. Material to be Filed as Exhibits.
Item
7 of
the Schedule 13D is hereby amended to include the following:
Exhibit
J- Letter dated July 9, 2008 from the Reporting Person to the Issuer’s Board of
Directors.
Exhibit
99.1- Press Release dated July 10, 2008.
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CUSIP
No. 313855108
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13D
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Page 6
of
6 Pages
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SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, the undersigned
certifies that the information set forth in this Statement is true, complete
and
correct.
Dated:
July 10, 2008
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/s/
Warren B. Kanders |
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Warren
B. Kanders
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Exhibit
J
Warren
B. Kanders
One
Landmark Square - 22nd
Floor
Stamford,
Connecticut 06901
Tel.:
(203) 552-9600
Fax:
(203) 552-9607
July
9,
2008
Via
Facsimile and Federal Express
Mr.
James
C. Janning
Chairman
of the Board
Federal
Signal Corporation
1415
West
22nd
Street
Oak
Brook, Illinois 60523
Dear
Mr.
Janning:
I
assume
that the Board has seen the recent analyst report prepared by BMO Capital
Markets Corp. downgrading Federal Signal Corporation (“FSS”) to “underperform.”
BMO’s analysis is both enlightening and cautionary - and gives the Board even
more reason to consider its selection of the next Chief Executive Officer most
carefully.
In
its
report, BMO states:
“We
believe the continuing pressures on US municipal budgets owing to softness
in
the US economy couple with signs of economic weakness outside the US,
particularly Europe, create the potential for earnings to fall below company
and
Street expectations. (Management guidance and the consensus estimate for 2008
EPS are $0.82 and $0.79, respectively)”
BMO
further observes:
“Federal
Signal is trading at a P/E of 15.5x estimated 2009 EPS of $0.85. On an EV/EBITDA
basis, the shares are trading at 9.7x our 2009 EBITDA estimate of $95.7 million.
We believe the premiums to our coverage group averages of 13.4x and 8.2x,
respectively, are unwarranted; the share price has performed surprisingly well
as compared with many other industrial names”.
BMO
concludes:
“As
a
result of a lower EBITDA estimate, our price target is lowered. Given the
company’s exposure to weakening end-markets, we do not believe Federal Signal’s
current valuation is warranted.”
Mr.
James
C. Janning
Chairman
of the Board and Acting Chief Executive Officer
July
9,
2008
Page
2 of
2
As
I am
the only candidate whose name has been publicly announced, it is possible to
conclude that FSS’ share price has been supported by my reputation, my purchases
of FSS stock which have been publicly disclosed, as well as purchases by some
of
FSS’s largest shareholders, who I have been informed, actively endorse my
candidacy.
As
a
result of its reduced estimate of FSS’s EBITDA for 2009, BMO lowered its price
target for FSS shares from $13 to $10. That would not only represent a 32%
discount to the July 8, 2008 closing price of FSS shares, it is well below
my
average cost basis, and I believe, the average cost basis of many other FSS
stockholders.
I
believe
that FSS’s future valuation will depend on FSS’s ability to generate growth
organically and through targeted acquisitions if the price of its shares is
to
maintain its premium to its peers and achieve higher than anticipated multiples
- areas in which I have achieved demonstrable success.
I
therefore find it difficult to believe that the Board is so naïve as to base its
selection of a CEO on personality tests, rather than a careful evaluation of
a
candidate’s history of proven performance and delivery of shareholder
value.
Let
me be
clear. I have repeatedly offered to accommodate the Board to meet in person
or
telephonically to discuss my candidacy, but have received no response. I remain
keenly interested in the CEO position and the future success of FSS. I intend
to
continue to purchase shares in the market, as circumstances dictate, as further
evidence of my commitment.
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Very
truly yours,
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/s/
Warren B. Kanders
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Warren
B. Kanders
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WBK/bdr
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cc:
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James
E. Goodwin
Charles
R. Campbell
John
F. McCartney
Joseph
R. Wright
Robert
Gerrity
Robert
Hamada
Paul
Jones
Dennis
Martin
Brenda
Reichelderfer
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