WORK WE’VE DONE: CASE STUDIES

Battling for board seats

Company is faced with a dissident shareholder group—led by 5% holder—that is attempting to grab board seats at the annual meeting. Proxy contest becomes a referendum on the strategic direction of the company and its growth strategy.

Client Challenge: Successfully defend against proxy battle with a dissident shareholder that disagrees with the company’s direction

A dissident shareholder group—led by a 5% holder—launched a proxy battle with client company in order to grab board seats, including placing the primary representative of the 5% holder on the Board. The proxy battle centered around the company’s return on assets, acquisitions and growth strategy. The Board believed that the dissidents’ analyses was flawed and view of its business was short-sighted. Would shareholders agree with the path that management had taken and support the incumbent directors or side with the dissidents?

Sharon Merrill Approach: Reinforce the merits and success of management’s growth strategy

Sharon Merrill launched an aggressive outreach campaign to all shareholders, which was designed to promote the success of the company’s growth strategy, emphasize the quality of its current Board and highlight the flaws in the dissident’s position. Sharon Merrill spearheaded the development of a wide range of investor materials including proxy fight letters, news releases, presentations, FAQS, and conference calls. Through each step of the proxy process, we assisted management with messaging and crafting counterpoints to each of the dissident’s arguments.

Results: Company’s outside director is re-elected and dissident shareholder is kept off Board

The Company was ultimately successful in keeping the dissident shareholder from joining its board of directors. During the lengthy proxy process, management developed stronger relationships with a number of its top shareholders and gained valuable feedback on overall shareholder perceptions. On the day in which the certified results were announced, the stock rose more than 10%, and within three months, the stock price was up more than 40%.