August 14, 2015 / 2:43 PM / 3 years ago

UPDATE 2-Activist investor Sandell asks Ethan Allen to consider sale

(Adds Ethan Allen comment)

Aug 14 (Reuters) - Activist investor Sandell Asset Management Corp said Ethan Allen Interiors Inc should consider selling itself to a private equity firm or monetizing its real estate holdings.

Sandell, which owns about 5.5 percent of the furniture retailer, said the company could be worth about $41 per share with its real estate fetching about $450 million, or $16 per share.

Ethan Allen’s shares closed up 1.2 percent at $31.39 on the New York Stock Exchange on Friday.

Sandell said it was prepared to nominate a slate of directors to Ethan Allen’s board.

Ethan Allen said in a statement it would postpone the shareholder meeting to Nov. 24 from Oct. 15, saying it wanted to give all shareholders an opportunity to submit nominations.

Sandell said earlier in the day that Ethan Allen advanced its annual shareholder meeting to Oct. 15 from Nov. 17 with an intention to “subvert the nomination process.”

The company’s total sales fell nearly 3 percent in the fourth quarter ended June 30. They grew at a slow pace in the past two quarters.

Sandell was previously involved in a proxy fight with Bob Evans Farms Inc, pressuring it to do a sale-leaseback transaction for its restaurant properties.

There are many interested parties and several ways to help the company unlock value, Sandell said in a letter to Ethan Allen Chief Executive Farooq Kathwari.

The options range from a series of sale-leaseback transactions to the creation of a tax-efficient real estate investment trust, Sandell said.

Up to Friday’s close, Ethan Allen’s shares had risen 3.8 percent since Sandell Asset head Tom Sandell said on July 15 that the company was his best idea. (Reporting by Sruthi Ramakrishnan and Yashaswini Swamynathan in Bengaluru; Editing by Maju Samuel and Don Sebastian)

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