Another shareholder has stepped up to urge Carreker Corp. to sell itself.
The Los Angeles hedge fund Riley Investment Management LLC said in a regulatory filing last week that it had acquired nearly 10% of the Dallas payment software vendor's stock, and that its principal, Bryant R. Riley, was seeking representation on Carreker's board.
The filing, an amended version of a document filed a week earlier, said that Mr. Riley had told Carreker's management that he "believed that the company's operating expenses were too high, and these costs had served to mask the profitability that a strategic acquirer would achieve in an acquisition of the company."
Mr. Riley is considering nominating candidates to unseat some Carreker directors, unless the company addresses his concerns, the filing said. Carreker's annual meeting is scheduled for July 13 in Dallas.
John D. "Denny" Carreker, the company's chairman and chief executive, said in an interview Friday that he has been talking to Riley Investment. "Our company is our company, and nothing going on now is changing that."
Though he noted that Carreker formed a committee in November to review its "strategic direction," he expressed confidence about the company's future.
"As people see the fruits of what we are doing, as people see we are all about optimizing customer value and shareholder value, this rough, churning water will settle, and we can get back to the business of serving our customers and growing the value of our stock," he said.
Mr. Riley did not respond to calls for comment.
Riley Investment is the second company this month, and the third in the past year, to call for change at Carreker.
This month the vendor said it had hired Bear, Stearns & Co. as part of a strategic review of its options. That announcement came after another Los Angeles hedge fund, Chapman Capital LLC, said it had bought more than 5% of Carreker's stock and was calling for the company to put itself up for sale.
In March, Carreker gave a board seat to a representative of Prescott Group Capital Management LLC of Tulsa. Prescott, which owns more than 7% of the vendor's shares, had complained in July that the stock was undervalued.
At its peak in early 2001, Carreker's stock traded at $39.50 a share. At its low in early 2003 the price was $2.01. The shares closed down a penny Friday, at $6.73.
