Discovery Group Urges TESSCO Technologies to
Hire an Investment Banker to Respond to
March 05, 2010 09:52 AM Eastern Time
CHICAGO--(EON: Enhanced Online News)--In a letter to the Board of Directors of TESSCO Technologies, Inc.,
the Company's largest non-management shareholder, Discovery Group disclosed that it has been advised by several
third parties that attempts to contact the management at TESSCO to discuss a potential acquisition of the Company
have been met with a lack of constructive response. Discovery Group owns 14.2% of TESSCO’s stock and
believes that the Board should hire an investment banker to coordinate a professional response to these inquiries and
evaluate their merits. In an addendum to its letter, which was filed with the Securities and Exchange Commission,
Discovery provides a summary of its analysis that suggests that the improvement in shareholder value in a change-of-
control transaction could be substantial relative to the price of TESSCO shares today.
The letter points out what Discovery believes to be several relevant governance flaws at TESSCO, including the
Board’s adoption of a poison pill in the face of a potential takeover threat by one of the Company’s competitors.
Other concerns expressed by Discovery, such as staggered director terms, a low level of director investment in
TESSCO stock, missed operating targets, excessive management and director compensation are all elements of a
culture of management entrenchment that Discovery argues subverts the interests of the non-management, public
Dan Donoghue, a Managing Partner at Discovery said, “It is unfortunate that a high-quality business, in a robust
industry, with exceptional employees and strong customer relationships must bear the stain of such poor stewardship
of investor resources.” Discovery states in its letter that the investment manager plans to withhold its votes for Mr.
Dennis Shaugnessy and Mr. Jay Baitler, directors whose terms are expiring at this year’s ann