MONDAY MORNING: Pioneer under Lens’ microscope

Would someone please buy John Cogan a set of golf clubs?

While Mr. Cogan appears amazingly fit at age 73, he is undoubtedly losing his edge when it comes to running Pioneer Group Inc., which with $23.5 billion in assets under management falls firmly in the small-to medium-size category among mutual fund groups. While similar companies are running (or are being pushed) into the open arms of suitors, Mr. Cogan, Pioneer’s chairman and one of its largest stockholders, seems intent on remaining independent.

Yes, I know Boston-based Pioneer recently hired Salomon Brothers and Merrill Lynch & Co. Inc. to review its strategic options, including a possible sale. But that’s hardly cause for making plans to attend the open house. After all, this is a firm that’s been trying to unload its money-losing Ghanian gold mine since last November 1998.

My confidence that Pioneer is serious about being acquired wasn’t helped last week when its mutual fund chief, David Tripple, was quoted as saying, “If we wanted to sell the company, we’d have gone out and cut a deal with somebody.”

Apparently, I am not alone. Lens Investment Management, a high-profile activist investment group in Portland, Maine, that owns 4.1% of Pioneer’s stock, filed a statement last week with the Securities and Exchange Commission nominating four of its own people for election to the fund company’s nine-member board. The new directors, who would replace Mr. Cogan, Mr. Tripple and other Pioneer insiders, would then push for the “auctioning of [Pioneer] to the highest bidder.”

By Lens’ estimation, Pioneer as a whole is worth at least $28 a share. Alone, its asset management business is worth a minimum of $38 a share. Either way, that’s far more than the $17.25 a share the stock was trading at before Lens got involved.

“They have run out of time,” says Robert Monks, chairman of Lens, which oversees $400 million in assets and has battled the likes of Sears Roebuck & Co. and American Express Co. Inc. “They have to let outsiders get involved.”

It’s worth mentioning that since meeting privately with Mr. Monks in December, Mr. Cogan has added three outsiders to Pioneer’s board. While that’s a step in the right direction, the new directors hardly qualify as independent, especially since Pioneer refuses to say who nominated them (Lens believes they were hand-picked by Mr. Cogan).

no need to apply

Pioneer declined to comment on Lens’ move, saying that it could not discuss proxy filings. But in a statement made less than 24 hours before the filing, Pioneer spokeswoman Anne W. Patenaude made it perfectly clear that no one from Lens would be a welcome addition to the board.

“There are no plans to increase the board beyond what’s already been announced,” she said.

The big mystery isn’t whether Lens will be successful in dragging Pioneer to the selling block. The fact that Pioneer’s stock surged 15.22% in the days that followed Lens’ filing — vs. a mere 2.8% after Pioneer announced it had hired the investment banks — shows that shareholders have finally grown tired of Mr. Cogan’s futile efforts to get Pioneer back on track. It shows that they want change. And, as we all know, investors always get what they want — sooner or later.

To my way of thinking, the real mystery is why Mr. Cogan is so opposed to a sale. With 3.65 million shares in his pocket, Mr. Cogan stands to rake in a cool $102 million in a sale, assuming the shares are sold at $28.

Maybe, just maybe, he’s got his eyes on a really nice set of golf clubs.