4 Reasons Why Triangle Capital Should Liquidate Now

On Thursday, Triangle Capital (NYSE: TCAP) announced that it had hired an advisor to explore strategic alternatives, and passed out golden parachutes to five executives. I take the news as a clear sign Triangle Capital is going to do something to maximize shareholder value, whether that's merging with a competitor or simply liquidating isn't certain.

But when it comes to what Triangle Capital should do, it's my view that a liquidation is the best course of action, even if it hasn't been a popular choice in the industry.

Most troubled business development companies look for a quick exit, selling the entirety of their portfolios at a discount to their last reported book value for cash and stock in another BDC. It happened most recently when American Capital Ltd. was sold to Ares Capital (NASDAQ: ARCC) at a price approximating 91% of book value, paid in cash and Ares Capital stock, with advisors and bankers also taking their share with various deal fees and expenses.

Source: Fool.com