Hedge fund Millbrook seeks to split up Unisys

NEW YORK/BOSTON, Jan 8 (Reuters) - Unisys Corp's (UIS.N) third-largest shareholder, hedge fund Millbrook Capital Management Inc, is calling for the technology services company to sell or spin off its U.S. government business, saying that could as much as triple its stock price.

Millbrook, whose MMI Investments LP is Unisys' third-largest shareholder with 34.8 million shares, or 9.9 percent of the outstanding stock, said it sent a letter to the company's board on Monday urging it to hire an independent investment bank to review strategic alternatives.

The review should focus on realizing the potential of the undervalued U.S. government business through a sale, tax-free spin-off or initial public offering, according to a copy of the letter seen by Reuters.

"In our view, the best alternative would be an initial public offering of 19 percent of the shares of a subsidiary of Unisys comprising all of its U.S. government services business," said the letter from Clay Lifflander, president of both Millbrook and MMI.

A spokesman for Unisys declined to comment on the matter.

(Reporting by Tiffany Wu in New York and Jim Finkle in Boston; editing by John Wallace)

((tiffany.wu@reuters.com; +1 646 223 6142; Reuters Messaging: tiffany.wu.reuters.com@reuters.net))

((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: topnews.reuters.com)) Keywords: UNISYS/MILLBROOK

(C) Reuters 2008. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN07442379