Will There Be Some Hedge Fund Remodeling at Griffon Corp.?

Hedge Fund operator Clinton Group, which beneficially owns about 5.2% in Griffon Corp. (GFF), recently delivered a letter tothis company, which makes everything from garage doors to specialty plastic films used in baby diapers, adult incontinence, and other products, stating its belief that the “market price of the Sharesfailed to reflect the stand-alone value of the Company’s operating subsidiaries.”

The letter also advised Griffon’s management that they should evaluate multiple strategic alternatives to enhance shareholder value, including, but not limited to, a tax-free spin-off, a sale of one or more subsidiaries, or a going-private transaction.

There is appeal to the Clinton Group’s argument, for Griffin might be too diversified in its manufacturing operations:

1. Garage Doors—selling to the residential housing and commercial building markets;
2. Installation Services—servicing the new residential housing market with an array of building related products, ranging from garage doors, manufactured fireplaces, floor coverings, and cabinetry;
3. Specialty Plastic Films—the maker of plastic and film laminates for use in infant diapers, adult incontinence products, feminine hygiene products and disposable surgical and patient care products;
4. Electronic Information and Communication Systems—selling airborne maritime surveillance and aircraft intercommunication management systems for defense and commercial markets.

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