UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.1)*
PRG-Schultz International, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class Securities)
69357c107
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(CUSIP Number)
Carlo Cannell
Cannell Capital, LLC, 150 California Street, 5th Floor, San Francisco, CA
94111 (415) 835-8300
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 29, 2005
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box.
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See ss.240.13d-7 for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosure provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a current
valid OMB control number.
CUSIP No. 69357c107
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Cannell Capital, LLC
94-3366999
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X].................................................................
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(b) .................................................................
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3. SEC Use Only..........................................................
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4. Source of Funds (See Instructions) OO.................................
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e)................................................................
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6. Citizenship or Place of Organization California...................
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Number of 7. Sole Voting Power 0...............................
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Shares
Beneficially
Owned by
Each
Reporting
Person
With:
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8. Shared Voting Power 7,527,948*....................
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9. Sole Dispositive Power 0............................
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10. Shared Dispositive Power 7,527,948*....................
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11.Aggregate Amount Beneficially Owned by Each Reporting Person 7,527,948*
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12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13.............Percent of Class Represented by Amount in Row (11) 11.8%
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14............................Type of Reporting Person (See Instructions) IA
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* See Item 5
CUSIP No. 69357c107
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
J. Carlo Cannell
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X].................................................................
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(b) .................................................................
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3. SEC Use Only..........................................................
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4. Source of Funds (See Instructions) OO.................................
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e)................................................................
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6. Citizenship or Place of Organization USA..........................
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Number of 7. Sole Voting Power 0 ..............................
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Shares
Beneficially
Owned by
Each
Reporting
Person
With:
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8. Shared Voting Power 7,527,948*...................
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9. Sole Dispositive Power 0............................
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10. Shared Dispositive Power 7,527,948*...................
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11.Aggregate Amount Beneficially Owned by Each Reporting Person 7,527,948*
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12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13.............Percent of Class Represented by Amount in Row (11) 11.8%
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14........................Type of Reporting Person (See Instructions) IN/HC
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* See Item 5
CUSIP No. 69357c107
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
The Cuttyhunk Fund Limited
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X].................................................................
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(b) .................................................................
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3. SEC Use Only..........................................................
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4. Source of Funds (See Instructions) WC.................................
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e)................................................................
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6. Citizenship or Place of Organization Bermuda......................
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Number of 7. Sole Voting Power 0 .............................
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Shares
Beneficially
Owned by
Each
Reporting
Person
With:
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8. Shared Voting Power 1,847,866*......................
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9. Sole Dispositive Power 0 ............................
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10. Shared Dispositive Power 1,847,866*.....................
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11.Aggregate Amount Beneficially Owned by Each Reporting Person 1,847,866*
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12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13.............Percent of Class Represented by Amount in Row (11) 2.9%
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14.........................Type of Reporting Person (See Instructions) CO
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* See Item 5
CUSIP No. 69357c107
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
The Anegada Master Fund Limited
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X].................................................................
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(b) .................................................................
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3. SEC Use Only..........................................................
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4. Source of Funds (See Instructions) WC.................................
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e)................................................................
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6. Citizenship or Place of Organization Cayman Islands...............
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Number of 7. Sole Voting Power 0 ..............................
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Shares
Beneficially
Owned by
Each
Reporting
Person
With:
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8. Shared Voting Power 1,637,358*......................
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9. Sole Dispositive Power 0 ............................
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10. Shared Dispositive Power 1,637,358*......................
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11.Aggregate Amount Beneficially Owned by Each Reporting Person 1,637,358*
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12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13.............Percent of Class Represented by Amount in Row (11) 2.6%
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14.........................Type of Reporting Person (See Instructions) CO
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* See Item 5
CUSIP No. 69357c107
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
GS Cannell Portfolio LLC
98-0232642
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X].................................................................
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(b) .................................................................
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3. SEC Use Only..........................................................
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4. Source of Funds (See Instructions) WC.................................
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e)................................................................
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6. Citizenship or Place of Organization Delaware.....................
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Number of 7. Sole Voting Power 0...............................
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Shares
Beneficially
Owned by
Each
Reporting
Person
With:
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8. Shared Voting Power 1,329,076*......................
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9. Sole Dispositive Power 0 ............................
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10. Shared Dispositive Power 1,329,076*......................
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11.Aggregate Amount Beneficially Owned by Each Reporting Person 1,329,076*
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12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13.............Percent of Class Represented by Amount in Row (11) 2.1%
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14.........................Type of Reporting Person (See Instructions) OO
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* See Item 5
CUSIP No. 69357c107
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Tonga Partners, L.P.
94-3164039
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X].................................................................
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(b) .................................................................
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3. SEC Use Only..........................................................
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4. Source of Funds (See Instructions) WC.................................
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items
2(d) or 2(e)................................................................
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6. Citizenship or Place of Organization Delaware.....................
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Number of 7. Sole Voting Power 0 .............................
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Shares
Beneficially
Owned by
Each
Reporting
Person
With:
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8. Shared Voting Power 2,713,648*....................
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9. Sole Dispositive Power 0............................
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10. Shared Dispositive Power 2,713,648*.....................
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11.Aggregate Amount Beneficially Owned by Each Reporting Person 2,713,648*
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12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13.............Percent of Class Represented by Amount in Row (11) 4.2%
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14.........................Type of Reporting Person (See Instructions) PN
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* See Item 5
Item 1 Security and Issuer
This statement relates to Common Stock ("Common Stock"), issued by
PRG-Schultz International, Inc., a Georgia Corporation (the "Company").
The address of the principal executive offices of PRG-Schultz
International Inc. is 600 Galleria Parkway, Ste 100, Atlanta, Georgia,
30339.
Item 2 Identity and Background
Name: Cannell Capital, LLC ("Adviser")
Place of Organization: California
Principal Business: Investment Adviser
Address: 150 California Street, 5th Floor, San Francisco, CA 94111
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Name: The Cuttyhunk Fund Limited ("Cuttyhunk")
Place of Organization: Bermuda
Principal Business: Investment
Address: 73 Front Street, Hamilton, Bermuda HM 12
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Name: The Anegada Master Fund Limited ("Anegada")
Place of Organization: Cayman Islands
Principal Business: Investment
Address: c/o Praesideo Fund Services, Ltd.
Harbour Centre, PO Box 1348, George Town, Grand Cayman, Cayman Islands
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Name: Tonga Partners, L.P. ("Tonga")
Place of Organization: Delaware
Principal Business: Investment
Address: 150 California Street, 5th Floor, San Francisco, CA 94111
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Name: GS Cannell Portfolio LLC ("GSCP")
Place of Organization: Delaware
Principal Business: Investment
Address: 701 Mount Lucas Road, CN 850, Princeton, NJ 08542
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Name: J. Carlo Cannell
Address: 150 California Street, 5th Floor, San Francisco, CA 94111
Criminal Proceedings: None
Applicable Civil, Judicial or Administrative Proceedings: None
Citizenship: United States
J Carlo Cannell is the controlling and managing member of Adviser.
Adviser serves as investment adviser to Cuttyhunk, Anegada, and GSCP.
Adviser is general partner and investment adviser to Tonga.
Item 3 Source and amount of Funds or other Consideration
The aggregate amount of funds used by Cuttyhunk to purchase 1,450,049
shares of Common Stock directly owned by it was approximately $8,250,586
Such amount was dervied from working capital. The 4.75 convertible
subordinated notes were also purchased with working capital.
The aggregate amount of funds used by Anegada to purchase 1,297,216
shares of Common Stock directly owned by it was approximately $6,586,091
Such amount was derived from working capital. The 4.75 convertible
subordinated notes were also purchased with working capital.
The aggregate amount of funds used by GSCP to purchase 1,042,681 shares
of Common Stock directly owned by it was approximately $5,270,258. Such
amount was derived from working capital. The 4.75 convertible
subordinated notes were also purchased with working capital.
The aggregate amount of funds used by Tonga to purchase 2,156,090 shares
of Common Stock directly owned by it was approximately $11,447,555. Such
amount was derived from working capital. The 4.75 convertible
subordinated notes were also purchased with working capital.
Item 4 Purpose of Transaction
The Common Stock was bought in the ordinary course of the Adviser's
management of the accounts of its investment advisory clients. As of
July 29, 2005 the Reporting Persons continue the formulation of plans
to seek maximization of the value of the Common Stock. Such plans may
include, but may not necessarily be limited to, pursuit of strategic
initiatives to enhance shareholder value. Such plans currently
include a proposal to acquire for $3.43 per share in cash all of the
outstanding shares of Common Stock of the Company at a premium to the
average closing price of the Company's Common Stock for the 20 trading
days preceding July 28, 2005. On July 28, 2005, the Adviser sent a
letter to the Company proposing to enter into immediate negotiations
with the Company's Board of Directors to acquire all of the outstanding
shares of common stock of the Company. A copy of such letter is
attached to this Statement as Exhibit 99.1 and its contents are
incorporated herein by reference.
Subject to availability at prices deemed favorable and in accordance
with applicable laws and regulations, the Reporting Persons may acquire
shares of Common Stock of the Company from time to time in the open
market, in privately negotiated transactions or otherwise. The
Reporting Persons may dispose of shares of Common Stock of the Company
from time to time in the open market, in privately negotiated
transactions or otherwise.
Except as set forth above, the Reporting Persons has no present plans
or intentions that relate to or that would result in any of the
transactions described in clauses (a) through (j) of item 4 of
Schedule 13D.
Item 5 Interest in Securities of the Issuer
(a) As of July 29, 2005, excluding shares of Common Stock that the
Reporting Persons have the right to acquire, the Reporting Persons
directly or indirectly beneficially owned 5,946,036 shares, or 9.5%, of
Common Stock of PRG-Schultz International, Inc. (the approximate number
of the shares of Common Stock owned is based on 62,306,089 shares of
common stock outstanding by PRG-Schultz International, Inc., on
April 30, 2005).
(i) Cuttyhunk owns 1,450,049 shares or 2.3% of the outstanding shares
of Common Stock.
(ii) Anegada owns 1,297,216 shares or 2.1% of the outstanding shares
of Common Stock.
(iii) GSCP owns 1,042,681 shares or 1.7% of the outstanding shares of
Common Stock.
(iv) Tonga owns 2,156,090 shares or 3.5% of the outstanding shares of
Common Stock.
As of July 29, 2005, the Reporting Persons directly or indirectly
benefically owned 1,581,912 shares of Common Stock issuable upon
conversion of the Issuer's 4.75% convertible subordinated notes.
Including such shares, the Reporting Persons are deemed to directly or
indirectly have beneficical ownership of 7,527,948 shares, and the
Issuer is deemed to have 63,887,912 shares issued and outstandinding.
Accordingly, the Reporting Persons are deemed to have benefical
ownership of 11.8% of the Common Stock,as follows:
(i) Cuttyhunk is deemed to have beneficial ownership of 1,847,866
shares, which represents 2.9% on an as converted basis;
(ii) Anegada is deemed to have beneficial ownership of 1,637,358
shares, which represents 2.6% on an as converted basis;
(iii) GSCP is deemed to have beneficial ownership of 1,329,076
shares, which represents 2.1% on an as converted basis;
(iv) Tonga is deemed to have beneficial ownership of 2,713,648
shares, which represents 4.2% on an as converted basis.
(b) The responses of the Reporting Persons to Items 7 through 11 of the
portions of the cover page of this Schedule D which relate to beneficial
ownership of shares of the Common Stock are incorporated herein by
reference.
(c) A list of transactions during the past 60 days.
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Party Date Amount Price per Where & How
Bought Share Effected
(Sold)
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ANEGADA 6/1/2005 85,239 4.04 Transaction w/ Pleiades
ANEGADA 6/7/2005 50,500 3.49 Open Market
ANEGADA (Cvt. Bond) 6/7/2005 56,809 7.74 Open Market
ANEGADA (Cvt. Bond) 6/13/2005 56,731 7.74 Open Market
ANEGADA 6/24/2005 19,593 2.90 Open Market
ANEGADA 7/7/2005 74,100 2.82 Open Market
ANEGADA (Cvt. Bond) 7/8/2005 20,258 7.74 Open Market
ANEGADA 7/11/2005 2,061 2.86 Open Market
ANEGADA 7/12/2005 18,372 2.90 Open Market
ANEGADA 7/13/2005 8,177 2.85 Open Market
ANEGADA 7/14/2005 15,467 2.87 Open Market
ANEGADA 7/15/2005 5,770 2.86 Open Market
ANEGADA 7/18/2005 19,427 2.85 Open Market
ANEGADA 7/19/2005 7,050 2.85 Open Market
ANEGADA 7/20/2005 5,312 2.86 Open Market
CUTTYHUNK (Cvt. Bond) 6/7/2005 64,548 7.74 Open Market
CUTTYHUNK (Cvt. Bond) 6/13/2005 64,574 7.74 Open Market
CUTTYHUNK 6/24/2005 8,700 2.90 Open Market
CUTTYHUNK 7/7/2005 70,649 2.82 Open Market
CUTTYHUNK (Cvt. Bond) 7/8/2005 21,680 7.74 Open Market
CUTTYHUNK 7/11/2005 1,500 2.86 Open Market
CUTTYHUNK 7/12/2005 13,500 2.90 Open Market
CUTTYHUNK 7/13/2005 5,900 2.85 Open Market
CUTTYHUNK 7/14/2005 11,400 2.87 Open Market
CUTTYHUNK 7/15/2005 4,300 2.86 Open Market
CUTTYHUNK 7/18/2005 14,300 2.85 Open Market
CUTTYHUNK 7/19/2005 5,100 2.85 Open Market
CUTTYHUNK 7/20/2005 4,000 2.86 Open Market
GSCP 6/1/2005 76,549 4.04 Transaction w/ Pleiades
GSCP 6/7/2005 40,700 3.49 Open Market
GSCP (Cvt. Bond) 6/1/2005 46,628 7.74 Open Market
GSCP (Cvt. Bond) 6/13/2005 46,641 7.74 Open Matket
GSCP 6/24/2005 16,600 2.90 Open Market
GSCP 7/7/2005 61,800 2.82 Open Market
GSCP (Cvt. Bond) 7/8/2005 15,801 7.74 Open Market
GSCP 7/11/2005 1,100 2.86 Open Market
GSCP 7/12/2005 9,900 2.90 Open Market
GSCP 7/13/2005 4,300 2.85 Open Market
GSCP 7/14/2005 8,300 2.87 Open Market
GSCP 7/15/2005 3,100 2.86 Open Market
GSCP 7/18/2005 10,500 2.85 Open Market
GSCP 7/19/2005 3,800 2.85 Open Market
GSCP 7/20/2005 2,900 2.86 Open Market
TONGA 6/1/2005 58,212 4.04 Transaction w/ Pleiades
TONGA 6/7/2005 83,800 3.49 Open Market
TONGA (Cvt. Bond) 6/7/2005 90,413 7.74 Open Market
TONGA (Cvt. Bond) 6/13/2005 90,452 7.74 Open Matket
TONGA 6/24/2005 34,300 2.90 Open Market
TONGA 6/27/2005 100 2.76 Open Market
TONGA 7/5/2005 100 2.76 Open Market
TONGA 7/7/2005 211,000 2.82 Open Market
TONGA 7/8/2005 100 2.76 Open Market
TONGA (Cvt. Bond) 7/8/2005 38,385 7.74 Open Market
TONGA 7/11/2005 3,000 2.86 Open Market
TONGA 7/12/2005 28,300 2.90 Open Market
TONGA 7/13/2005 12,400 2.85 Open Market
TONGA 7/14/2005 23,900 2.87 Open Market
TONGA 7/15/2005 8,900 2.86 Open Market
TONGA 7/18/2005 29,900 2.85 Open Market
TONGA 7/19/2005 10,700 2.85 Open Market
TONGA 7/20/2005 8,300 2.86 Open Market
(d) Not Applicable
(e) Pleiades Investment Partners - CC, L.P. ("Pleiades") ceased to be a
beneficial owner of shares of Common Stock on June 1, 2005.
Item 6 Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
J. Carlo Cannell controls and manages the Adviser who makes voting and
dispositive decisions for Cuttyhunk, Anegada, GS Cannell, and Tonga.
Item 7 Material to Be Filed as Exhibits
Exhibit 99.1. Letter from Cannell Capital, LLC to PRG-Schultz
International, Inc. Dated July 29, 2005
CANNELL CAPITAL LLC
150 California Street
San Francisco, Calif. 94111
Tel (415) 835-8300 Fax (443) 606-0067
info@cannellcap.com
July 29, 2005
PRG Schultz International, Inc.
600 Galleria Parkway, Suite 100
Atlanta, GA 30339
Attn: David A. Cole, Chairman
Dear David:
I am writing to inform you that Cannell Capital, LLC ("Cannell Capital")
is willing to acquire all of the outstanding shares of common stock of PRG
Schultz International, Ltd. (the "Company") that we do not already own, at a
price of $3.43 per share in cash (the "Acquisition"). Cannell Capital and
its affiliates are the beneficial owners of 7,527,948 shares of common stock
of the Company, representing 11.8% of the shares outstanding. This includes
Cannell Capital's beneficial ownership of approximately 1,579,328 shares of
common stock issuable on conversion of the Company's 4.75% convertible
subordinated notes (the "Notes").
Our proposal would offer stockholders a 20% premium to the average
closing price of the Company's common stock for the 20 trading days preceding
this letter, and would provide an opportunity for stockholders to realize
value for their shares to an extent not available in the public equity market.
Please note that while we intend to recapitalize the Company following
the Closing, Cannell Capital, together with its affiliates, has the resources
to consummate the transaction and refinance the Notes without requiring third
party financing.
We are prepared to enter into immediate discussions with the Company's
Board of Directors, with a view towards closing the Acquisition as soon as
practicable. The Proposal is subject only to completion of satisfactory due
diligence, the negotiation and execution of a definitive agreement with
standard representations, warranties and covenants, which will be mutually
satisfactory to Cannell Capital and the Company.
We are prepared to meet with you, your independent directors, or their
advisors, at your earliest convenience. Please contact Carlo Cannell or
Julian Allen at (415) 835-8300 to discuss the Acquisition. Please be aware
that Cannell Capital is required to amend its current 13D filing promptly to
include this letter.
Sincerely,
/S/ J. Carlo Cannell
J. Carlo Cannell
Managing Member
Cannell Capital LLC
Cc: Mitchell Nichter, Esq.
Paul Hastings Janofsky & Walker, LLC
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.
Date: July 29, 2005
J. Carlo Cannell
/s/ J. Carlo Cannell
------------------------------
J. Carlo Cannell
Cannell Capital, LLC
/s/ J. Carlo Cannell
------------------------------
J. Carlo Cannell, Managing Member
The Anegada Master Fund, Limited
/s/ J. Carlo Cannell
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J. Carlo Cannell, Managing Member
Cannell Capital, LLC, Investment Adviser
The Cuttyhunk Fund Limited
/s/ J. Carlo Cannell
------------------------------
J. Carlo Cannell, Managing Member
Cannell Capital, LLC, Investment Adviser
GS Cannell Portfolio LLC
/s/ J. Carlo Cannell
------------------------------
J. Carlo Cannell, Managing Member
Cannell Capital, LLC, Investment Adviser
Tonga Partners, L.P.
/s/ J. Carlo Cannell
------------------------------
J. Carlo Cannell, Managing Member
Cannell Capital, LLC, General Partner