-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BFW+rxtFbQ/B2KCU5QDXUNmyL5xWQIunDx6eJXE+7UaWGyZXYbdxxsDmJwKY0iz4 z3g4/kB6XS/oVda02ggiRg== 0001067621-06-000025.txt : 20060831 0001067621-06-000025.hdr.sgml : 20060831 20060831163302 ACCESSION NUMBER: 0001067621-06-000025 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20060831 DATE AS OF CHANGE: 20060831 GROUP MEMBERS: ANDREW DAKOS GROUP MEMBERS: BULLDOG INVESTORS GROUP MEMBERS: JAMES CHADWICK GROUP MEMBERS: LAWRENCE GOLDSTEIN GROUP MEMBERS: PHILLIP GOLDSTEIN GROUP MEMBERS: SOHAIL MALAD FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDSTEIN PHILLIP CENTRAL INDEX KEY: 0001067621 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 9147475262 MAIL ADDRESS: STREET 1: 60 HERITAGE DRIVE CITY: PLEASANTVILLE STATE: NY ZIP: 10570 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NORTH PITTSBURGH SYSTEMS INC CENTRAL INDEX KEY: 0000764765 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 251485389 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-32402 FILM NUMBER: 061068818 BUSINESS ADDRESS: STREET 1: 4008 GIBSONIA RD CITY: GIBSONIA STATE: PA ZIP: 15044-9311 BUSINESS PHONE: 7244439600 MAIL ADDRESS: STREET 1: 4008 GIBSONIA ROAD CITY: GIBSONIA STATE: PA ZIP: 15044-9311 SC 13D/A 1 thirdamendtwo.txt DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT 8/31/06 1. NAME OF REPORTING PERSON Bulldog Investors, Phillip Goldstein, Andrew Dakos, Santa Monica Partners Opportunity Fund, L.P., Santa Monica Partners L.P., Santa Monica Partners II L.P., Lawrence J. Goldstein, Monarch Activist Partners L.P., James Chadwick, Sohail Malad, Nadel and Gussman Funds LLC. 2. CHECK THE BOX IF MEMBER OF A GROUP a[X] b[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e) [] 6. CITIZENSHIP OR PLACE OF ORGANIZATION USA ________________________________________________________________ 7. SOLE VOTING POWER NA 8. SHARED VOTING POWER NA 9. SOLE DISPOSITIVE POWER NA _________________________________________________________ 10. SHARED DISPOSITIVE POWER NA 11. AGGREGATE AMOUNT OWNED BY EACH REPORTING PERSON 1,057,493 12. CHECK IF THE AGGREGATE AMOUNT EXCLUDES CERTAIN SHARES [] 13. PERCENT OF CLASS REPRESENTED BY ROW 11 7.05% 14. TYPE OF REPORTING PERSON NA ________________________________________________________________ 1. NAME OF REPORTING PERSON Phillip Goldstein, Andrew Dakos, Bulldog Investors 2. CHECK THE BOX IF MEMBER OF A GROUP a[X] b[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e) [] 6. CITIZENSHIP OR PLACE OF ORGANIZATION USA ________________________________________________________________ 7. SOLE VOTING POWER 530,822 8. SHARED VOTING POWER 0 9. SOLE DISPOSITIVE POWER 530,822 _________________________________________________________ 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT OWNED BY EACH REPORTING PERSON 530,822 12. CHECK IF THE AGGREGATE AMOUNT EXCLUDES CERTAIN SHARES [] 13. PERCENT OF CLASS REPRESENTED BY ROW 11 3.54% 14. TYPE OF REPORTING PERSON IA ________________________________________________________________ 1. NAME OF REPORTING PERSON Santa Monica Partners Opportunity Fund, L.P., Santa Monica Partners L.P., Santa Monica Partners II L.P., Lawrence J. Goldstein 2. CHECK THE BOX IF MEMBER OF A GROUP a[X] b[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e) [] 6. CITIZENSHIP OR PLACE OF ORGANIZATION USA ________________________________________________________________ 7. SOLE VOTING POWER 379,393 8. SHARED VOTING POWER 0 9. SOLE DISPOSITIVE POWER 379,393 _________________________________________________________ 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT OWNED BY EACH REPORTING PERSON 379,393 12. CHECK IF THE AGGREGATE AMOUNT EXCLUDES CERTAIN SHARES [] 13. PERCENT OF CLASS REPRESENTED BY ROW 11 2.53% 14. TYPE OF REPORTING PERSON IA ________________________________________________________________ 1. NAME OF REPORTING PERSON Monarch Activist Partners L.P., James Chadwick, Sohail Malad, Nadel and Gussman Funds LLC 2. CHECK THE BOX IF MEMBER OF A GROUP a[X] b[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e) [] 6. CITIZENSHIP OR PLACE OF ORGANIZATION USA ________________________________________________________________ 7. SOLE VOTING POWER 147,278 8. SHARED VOTING POWER 0 9. SOLE DISPOSITIVE POWER 147,278 _________________________________________________________ 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT OWNED BY EACH REPORTING PERSON 147,278 12. CHECK IF THE AGGREGATE AMOUNT EXCLUDES CERTAIN SHARES [] 13. PERCENT OF CLASS REPRESENTED BY ROW 11 ..98% 14. TYPE OF REPORTING PERSON IA This statement constitutes amendment No.3 to the Schedule 13D filed on April 4, 2006. Except as specifically set forth herein, the Schedule 13D remains unmodified. Item 4 is amended as follows: ITEM 4. PURPOSE OF TRANSACTION The reporting persons have sent the attached letter (Exhibit 1) to the Issuer on August 31, 2006. Item 5 is amended as follows: ITEM 5. INTEREST IN SECURITIES OF THE ISSUER As per the 10Q filed on 8/9/06 there were 15,005,000 shares of NPSI outstanding as of 8/7/06. The percentage set forth in item 5 was derived using such number. Bulldog Investors, Phillip Goldstein and Andrew Dakos beneficially own an aggregate of 530,822 shares of NPSI. Power to dispose and vote securities resides solely with Mr. Goldstein or Mr. Dakos or jointly with both. Santa Monica Partners, SMPII, SMPOF and accounts of Lawrence J. Goldstein are beneficial owners of 379,393 shares of NPSI. Power to dispose and vote securities resides with Mr. Lawrence J. Goldstein. Monarch Activist Partners L.P. is the beneficial owner of 147,278 shares of NPSI. Power to dispose and vote securities resides with Mr. James Chadwick. NGCF is the beneficial owner of 5,000 shares of NPSI. Power to vote and dispose of securities resides with Chadwick Capital whose managing partner is Mr. James Chadwick. c) During the past 60 days the following shares of NPSI were traded (unless already reported): Bulldog Investors, Phillip Goldstein and Andrew Dakos: Date Transaction Shares Share Price 8/3/2006 sell -2,000 25.5003 8/4/2006 sell -1,618 26 8/14/2006 sell -2,000 25.38 8/14/2006 sell -500 25.38 8/14/2006 sell -200 25.38 8/14/2006 sell -400 25.38 8/14/2006 sell -3,000 25.38 8/15/2006 sell -2,000 25.4265 8/15/2006 sell -1,500 25.4265 8/15/2006 sell -720 25.4265 8/15/2006 sell -1,000 25.4265 8/15/2006 sell -1,500 25.4265 8/15/2006 sell -6,000 25.4265 8/18/2006 sell -2,000 25.3 8/21/2006 sell -3,600 25.1504 8/21/2006 sell -1,100 25.1504 8/21/2006 sell -123 25.1504 8/21/2006 sell -300 25.1504 8/21/2006 sell -800 25.1504 8/21/2006 sell -4,365 25.1504 8/22/2006 sell -2,043 25.1042 8/24/2006 sell -111 25.15 8/25/2006 sell -2,000 25.25 Santa Monica Partners, SMPII and SMPOF and accounts of Lawrence J. Goldstein: Date Transaction Shares Share Price 7/19/2006 buy 11678 23.5 7/19/2006 buy 39155 23.5 7/19/2006 buy 2576 23.5 8/16/2006 sell -220 25.72 8/16/2006 sell -2535 25.636 8/16/2006 sell -730 25.72 8/16/2006 sell -8502 25.636 8/16/2006 sell -50 25.72 8/16/2006 sell -558 25.636 8/30/2006 sell -1682 25.23 Monarch Activist Partners L.P., NGCF Date Transaction Shares Share Price 8/3/2006 sell -5000 25.6158 8/16/2006 sell -5000 25.6631 d) Beneficiaries of managed accounts are entitled to receive any dividends or sales proceeds. e) NA Item 7 is amended as follows: ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1. Letter to Board of Directors After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: 8/31/06 By: /s/ Phillip Goldstein Name: Phillip Goldstein By: /s/ Andrew Dakos Name: Andrew Dakos By: /s/ Lawrence J. Goldstein Name: Lawrence J. Goldstein By: /s/ James Chadwick Name: James Chadwick By: /s/ Sohail Malad Name: Sohail Malad Exhibt 1. Letter to Board of Directors [Bulldog Investors Letterhead] August 31, 2006 Mr. Harry R. Brown Board of Directors* North Pittsburgh Systems Inc. 4008 Gibsonia Road Gibsonia, PA 15044-9311 Dear Mr. Brown, We are writing in response to your recent letter rejecting our proposal requesting that North Pittsburgh Systems, Inc. ("NPSI", the "Company") hire an investment banker for the purpose of marketing the company for sale. In your response you also reject our earlier proposal, using NPSI's excess cash along with modest borrowings to conduct a Dutch auction self-tender offer. The basis for these proposals is our belief that the Company's stock trades at a discount to private market value. As NPSI's largest shareholder, we have a keen interest in maximizing value for all shareholders and have tried to work cooperatively with you to that end. Your rejection of each of the proposals we submitted fails to provide any support to the Board's decision other than to merely state that the proposals "would not be in the best interests of the Company or its shareholders." This is disappointing particularly in light of the time and effort members of our group took to articulate our views during our meeting in Harrisburg, PA with you and Chairman Charles Thomas this past May. Why didn't the Board provide any details of the "careful consideration" given to the proposals? Don't you think that shareholders deserve more than such a terse response? We would like the board to reconsider its decision. In light of the valuation garnered by Hector Communications Corporation in its pending sale transaction, which sparked the interest of many would-be acquirers, we firmly believe that there are many parties that would be attracted to bid for NPSI at valuations higher than current market prices. Therefore, we again call for the board to promptly engage an investment banker for the purpose of marketing the Company for sale. Let us illustrate to what extent NPSI's fair value is higher than its current stock price. There are several ways to value a rural telephone company. In many ways, NPSI is quite different than its peers insofar as it is one of the only unlevered (on a true net debt basis) publicly traded RLECs. We recognize that the company's inefficient capital structure makes comparisons a disadvantage to NPSI. Nevertheless, ignoring capitalization at this time and referencing the Hector Communications proxy statement filed on August 4, 2006, Hector's financial advisor analyzed comparable ILECs (to which NPSI is comparable) and found that the mean multiple paid on a Total Enterprise Value to LTM EBITDA basis was 8.9x. This multiple applied to NPSI's LTM EBITDA of approximately $54.8 million (including the wireless operations) would imply an equity value in a sale of approximately $35 per share. Alternatively, recognizing the unique characteristics of NPSI's business in terms of its ILEC, CLEC and wireless investments, the company may reasonably be valued on a per access line basis. Applying $3,863 (the mean value listed in Hector's proxy) per ILEC access line, a $1,950 value per access line for NPSI's CLEC lines (conservatively estimated at a 50% discount to ILEC values), and a 9.0x EBITDA multiple (based on an 8.0-10.0x range for wireless transactions we researched) for the Company's wireless operations, we come to a value of approximately $34 per share. Keep in mind this valuation assigns no value to the Company's DSL lines due to a lack of publicly available comparable transactions. Clearly, NPSI is worth considerably more than its current stock price of approximately $25 per share. If the Board continues to believe our proposals are a bad idea we would like to know why. If you can convince us that you have a better plan to maximize shareholder value soon we would be very happy to listen. Absent this we will have no choice but to put the matter to a shareholder vote at next year's annual meeting. We request a response no later than September 15th, 2006. Very truly yours, Andrew Dakos Principal *Please confirm delivery of this letter to all members of the Board: Harry R. Brown Dr. Charles E. Cole Frederick J. Crowley Allen P. Kimble Stephen J. Kraskin David E. Nelson Charles E. Thomas -----END PRIVACY-ENHANCED MESSAGE-----