UPDATE 1-EMS Tech says full board evaluates alternatives

Tue May 3, 2011 10:43am EDT

* EMS responds to activist demands

* Board is engaged in "thorough process" (Adds background to the process)

By Nadia Damouni

NEW YORK, May 3 (Reuters) - EMS Technologies Inc ELMG.O responded on Tuesday to activist investor MMI Investments LP's demands to hire an independent special committee to run its sale process.

"As we publicly announced, our full board is engaged in a thorough process to evaluate strategic alternatives for EMS, including a sale of the company or one or more of its businesses," the company said in a statement.

EMS also said it has offered New York-based hedge fund MMI an opportunity to be involved in the process alongside the board.

In MMI's most recent letter to the company sent on Sunday, the fund criticized the current board's ability to manage its sales process given their "weak track record in M&A" and questioned the motivation behind postponing the annual meeting.

MMI also made several requests including the formation of an independent special committee to oversee the process.

"While MMI is insisting that EMS establish a special committee of the board to oversee this process, the board believes that EMS's shareholders are best served by the full board actively overseeing this critical process, which it expects will include the review and evaluation of potential offers," the company said.

EMS announced strategic alternatives on April 19 after months of pressure by MMI, which owns a 7.8 percent stake in the company. EMS said it had received inquiries from potential buyers. [nL3E7FJ2G0]

BofA Merrill Lynch is serving as financial adviser, and King & Spalding LLP and Kirkland & Ellis LLP are serving as legal counsel to EMS and its board of directors. (Reporting by Nadia Damouni, editing by Dave Zimmerman)

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