A client faced a dissident shareholder group attempting to grab board seats at its annual meeting. The company tapped SMA to spearhead communications during the proxy contest, which became a referendum on the company’s strategic direction and growth strategy.
Client Challenge
Successfully defend against proxy battle with a dissident shareholder that disagrees with the company’s direction
A dissident shareholder group launched a proxy battle against the client company to grab board seats, including placing the primary representative–one of the company’s major shareholders–on the Board. The proxy battle centered on the company’s return on assets, acquisitions and growth strategy.
The Board believed that the dissident’s analysis was flawed and its view of the business short-sighted. Would shareholders agree with the path that management had taken or side with the dissidents?
The Sharon Merrill Advantage
Reinforce the merits and success of management’s growth strategy
SMA launched an aggressive communications campaign to convince shareholders to vote for the company’s incumbent outside director. The campaign promoted the success of the company’s growth strategy, highlighted the quality of its current Board and pointed out the flaws in the dissident’s position. Messages were conveyed through a wide range of investor materials including proxy fight letters, news releases, presentations, FAQs and conference calls. Through each step of the proxy process, SMA worked with management to craft 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 succeeded in preventing the dissident shareholder from joining its Board. During the lengthy proxy process, management developed stronger relationships with a number of its top shareholders. 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%.
