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12/13/2022

Countryside Agrees Deal with Investor, CEO Steps Down

Bloomberg (12/13/22) Sidders, Jack

Countryside Properties Plc (CSPLF) CEO Iain McPherson is stepping down just as the U.K. homebuilder agreed to a deal with investor Browning West, accompanied by a slump in shares. The deal includes a board seat for Browning West partner Peter Lee, and in return the hedge fund has promised not to pursue further resolutions at shareholder meetings, circulate statements, or try to oust other directors. "Iain McPherson has led Countryside through a challenging period, including the Covid pandemic, and has clarified the group's strategy, which is to focus all of our resources on our market-leading partnerships business," stated Chairman John Martin. Countryside has veered away from building homes for private sale to concentrate on its partnerships business, which develops primarily low-cost housing for public entities and affordable housing providers. The company said trading has been "below expectations" in the first quarter, with profit and revenue struck by less completions. Countryside shares fell as much as 19.7% Thursday, the biggest decline since May 2020. The company was trading at 339.6 pence a share at 9:02 a.m. in London. Browning West is Countryside's No. 2 shareholder with a nearly 9.6% interest, according to filing data as of October.

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1/21/2022

Unilever Bid Fiasco Ramps Up Pressure on Managers to Deliver Plan B

Financial Times (01/21/22) Evans, Judith; Agnew, Harriet; Kuchler, Hannah

Unilever Plc (UL) Chief Executive Alan Jope's efforts to acquire GlaxoSmithKline (GSK) and Pfizer’s (PFE) consumer health division have failed. Unilever management has expressed confusion, skepticism, and straight-out opposition to the attempts, according to several shareholders. Unilever’s share price fell as much as 11% before the company announced it would not be making a fresh offer. The reaction to the bid has plunged the FTSE 100 consumer goods group into its biggest crisis since it fought off a hostile approach by Kraft Heinz (KHC) five years ago, calling into question Jope’s management and blowing open a debate on how Unilever can boost its sluggish performance. “Unilever surely needs to address the fact that five years later the share price is only at the level of that (Kraft Heinz) bid,” said Terry Smith, a top-15 shareholder, in a letter to investors on Thursday. “Why then should we trust this management and board with preserving value for shareholders?” The GSK acquisition was intended to accelerate sales growth by applying Unilever’s marketing and distribution machine to health brands, but instead it prompted an outcry. Investors took fright at the scale of the potential deal, which could have pushed up Unilever’s debt to 4.5 or five times earnings. But not all were opposed to its general direction, said Bruno Monteyne, an analyst at Bernstein. Bert Flossbach, founder and chief investment officer at Flossbach von Storch, an €80 billion asset manager that is among Unilever’s top 10 shareholders, said: “Jope is in a tough position because Unilever has been a lame duck for a long time. But if there is nothing to buy at a reasonable price, then don’t buy anything.” The GSK bid has further shaken confidence in the ability of the chief executive and his chief financial officer, Graeme Pitkethly, to deliver change. “They’ve shown their hand: they clearly don’t have confidence in the existing business, otherwise they wouldn’t have been contemplating this,” said an investor who asked not to be named. Smith and others have also criticized Unilever’s focus on its sustainability credentials. Unilever indicated this week that it would be open to other large consumer health deals. But analysts and rating agencies played down the prospect of an acquisition or merger on the scale of the GSK division after poor outcomes from other recent large consumer deals.

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1/21/2022

Sabre Exec Joining Board of India's Yatra in Win for Investor Maguire

Skift.com (01/21/22) Parsons, Matthew

Yatra's (YTRA) appointment of Sabre's (SABR) Chief Commercial Officer Roshan Mendis as an independent board member should satisfy Australian investment firm Maguire Investment Trust, which has been pushing to operationally revamp the Indian corporate travel agency. Yatra also entered into a cooperation pact with Maguire, which owns 7.4% of the company, where it will "abide by certain customary standstill and voting provisions for a period of 18 months from the date of signing of the agreement." In a July 21 open letter, Maguire said Yatra had "an extremely shareholder-unfriendly corporate governance profile and a lack of transparency in its executive compensation packages." The firm stated reservations about the company's corporate governance and executive compensation practices. "We have already suggested one extremely capable candidate who the board failed to even offer an interview, let alone legitimately consider appointing to the board," Timothy Maguire wrote. "We believe a change in tone at the top is essential and the board should immediately solicit shareholder recommendations for highly qualified director candidates to be named as nominees for election at an annual general meeting of shareholders scheduled for 2021." Maguire additionally said he wanted to drive Yatra's stock price on the Nasdaq exchange to at least $6 per share in 2022, and realize $100 million in sales. It is presently trading at $1.84. Mendis will replace Sean Aggarwal, who has left the board "due to other pressing commitments." Yatra further stated that "his retirement is not the result of any disagreement with the company or any of its affiliates on any matter relating to the company's operations, policies, or practices." ProKonsul Consulting President Gaurav Sundaram said Mendis' appointment signals a resolution of a potential clash with Maguire. "The failed Ebix [EBIX] acquisition has dented confidence, and for Yatra to succeed in the post-Covid world it will need additional management resources that can leverage the complexities and opportunities of the e-commerce and business travel domains," he said. "Such additions will allow Yatra to quickly increment growth and cross-selling synergies inherent in its business model." Yatra is also planning to take the company public in India in the first half of this year, and use the proceeds to buy up other local companies and fortify its balance sheet. Yatra racked up a $1.9 million loss for its 2022 second quarter, and is refocusing on the cargo sector, seeking to churn out $4 million to $5 million in freight-forwarding revenue this year. Taiwan's Fuh Hwa Securities Investment Trust Co., Ltd. has obtained a 4% interest in Yatra, according to a Jan. 14 SEC filing. "I look forward to working with Roshan and the other directors on our board, as we continue advancing our multi-channel strategy and deliver results for shareholders," said Yatra CEO Dhruv Shringi. "Amidst ongoing industry disruption and evolving consumer trends, we believe we are poised to capitalize on the accelerated shift by consumers to booking travel online and well positioned to deliver on growth and profitability post the pandemic."

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1/21/2022

Voss Capital Issues Detailed Investor Presentation On Griffon Corp.

PRNewswire (01/21/22)

Voss Capital LLC, a significant shareholder of Griffon Corp. (GFF), has announced that it has issued a presentation outlining Voss’s history of engagement with the company, the ongoing issues with Griffon’s conglomerate structure and corporate governance, and opportunities to create value through the addition of Voss's highly experienced candidate to Griffon Corp.'s Board of Directors.

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1/20/2022

SEBI Mandates Splitting Posts of Chairman and MD/CEO Before April 1

India Briefing (01/20/22) Bhardwaj, Naina

India's biggest companies must split the position of chairman and managing director by March 31. The chairman and the managing director, or chief executive officer, can't be related to each other, and the position of chairman must be held by a non-executive member. The new mandate from India's securities regulator SEBI takes effect April 1 and applies to the top 500 listed companies by market capitalization. The regulator issued a notification of a requirement to separate the roles in 2018, but delayed the rule after receiving feedback from India's private sector. SEBI says splitting the chairman and managing director position will help improve corporate governance in India. The regulator says the new provision is not intended to weaken the position of promoters. Market observers say the new mandate is most likely to impact family-owned businesses.

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1/20/2022

Netflix to Eliminate Supermajority Requirement for Board Changes Following Investor Demand

CNBC (01/20/22) Elias, Jennifer

Netflix (NFLX) said in its fourth-quarter earnings report that it will propose the removal of a supermajority provision that has required 66% of the votes for board member changes. "While our current governance structure has served our shareholders extraordinarily well with a sustained period of substantial growth, we've clearly proven our business model," the company said. "So the Netflix Board has decided to evolve to a more standard large-cap governance structure and will recommend several changes at our next annual meeting." Netflix added that it will permit shareholders to call special meetings and amend the voting standard for its directors in uncontested elections. Stockholders have been demanding the change to a simple majority for years. Five times since 2013, they have backed a proposal at the annual meeting to eliminate the supermajority requirement. In its proxy filing ahead of the last shareholder meeting in June, Netflix stated: "We believe that in the current dynamic business environment, the supermajority we have in place is appropriate to increase stability in our operations, while still being set low enough for stockholders to have a voice on issues where there is strong consensus. We will continue to monitor and evaluate this issue." The new notice was posted on the same day Netflix reported fourth-quarter earnings and revenue that topped estimates, although shares plummeted almost 20% in after-hours trading on decelerating subscriber growth.

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1/20/2022

DIRTT Provides Updates Regarding Conduct of Investor

GlobeNewswire (01/20/22)

DIRTT Environmental Solutions Ltd. (DRTT) provided an update on the path forward in responding to the Nov. 17, 2021, requisition issued by 22NW Fund, LP. The company announced that while it remains focused on realizing its potential as its top priority, it believes it has no choice but to file an application with the Alberta Securities Commission against the investor and another shareholder for breaching take-over bid and early warning reporting provisions under applicable Canadian securities laws, in order to protect minority shareholders and ensure that all shareholders are provided with full and accurate information. 22NW’s refusal to meet with the company regarding its requisition raises fundamental concerns, including its credibility. In a recent press release, 22NW claimed it had delivered executed documents from the beneficial owners of a majority of DIRTT’s outstanding shares in support of the election of 22NW’s six candidates nominated for election pursuant to the requisition. DIRTT is committed to ensuring that all shareholders have the benefit of full and accurate information before votes are counted at the annual and special meeting of shareholders.

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1/20/2022

PTC India Financial Shares Slump After Directors Quit on Corporate Governance Issues

Reuters (01/20/22) Sethuraman, Nallur; Mitra, Anuron Kumar

On Jan. 20, shares of PTC India Financial Services Ltd. fell more than 18% after three of its independent directors—Kamlesh Shivji Vikamsey, Thomas Mathew, and Santosh Nayar—resigned, citing lapses in corporate governance. In his resignation letter, Mathew said independent directors had repeatedly notified the company about serious lapses in corporate governance. "I have placed on record many times—specially over the last few months—my deep displeasure about the lack of appropriate information being made available to the board," he said. The letter highlighted such issues as the appointment of a full-time director, non-disclosure of a forensic audit report regarding a loan account, and unilateral changes in loan conditions without board approvals. Mathew added that the company did not address corporate governance issues reported by the previous chairman, Deepak Amitabh. The company said it rejects the allegations from the directors.

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1/20/2022

Carl Icahn Owns 4% Stake in International Flavors & Fragrances, Sources Say

CNBC (01/20/22) Li, Yun

Sources told CNBC's David Faber that Carl Icahn owns a 4% stake in International Flavors & Fragrances (IFF), whose shares rose 2% after the news broke. Icahn also recently acquired an interest in Southwest Gas (SWX) as he presses the utility to dump its acquisition of Questar Pipeline. Meanwhile, IFF named Frank Clyburn the company's CEO starting Feb. 14, succeeding Andreas Fibig. IFF's 2019 merger with DuPont's (DD) nutrition and biosciences unit established a $45 billion consumer behemoth. The company's shares have declined about 6% in the year to date after rising 38% in 2021.

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