Additional Proxy Soliciting Materials - Non-management (definitive) (dfan14a)
January 16 2020 - 5:19PM
Edgar (US Regulatory)
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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by the Registrant ¨
Filed
by a Party other than the Registrant þ
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under Rule 14a-12
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Enzo Biochem, Inc.
(Name of Registrant as Specified In Its Charter)
Harbert Discovery Fund, LP
Harbert Discovery Co-Investment Fund I, LP
Harbert Discovery Fund GP, LLC
Harbert Discovery Co-Investment Fund I GP, LLC
Harbert Fund Advisors, Inc.
Harbert Management Corporation
Jack Bryant
Kenan Lucas
Raymond Harbert
Fabian Blank
Peter J. Clemens, IV
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (check the appropriate
box):
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Glass Lewis Recommends Shareholders
Vote For the Election of Both Harbert Discovery Fund Nominees to Enzo Biochem’s Board
Glass Lewis Supports HDF’s
Case for Change at Enzo and the Need for Fresh Perspectives in the Boardroom
Concludes that “Enzo has
Underperformed Every Benchmark Over Every Period”
Glass Lewis Describes the Company’s
Arguments as, “Decidedly Dubious,” “Entirely Unconvincing” and “Rehashed Promises”
Urges Enzo Shareholders to Vote
FOR HDF’s Highly-Qualified Independent Nominees Fabian Blank and Peter Clemens on the BLUE Proxy Card Today
Birmingham, AL, January 16, 2020 – Harbert
Discovery Fund, LP and Harbert Discovery Co-Investment Fund I, LP (collectively “HDF”), the beneficial owners of more
than 11.8% of the outstanding shares of Enzo Biochem, Inc. (NYSE: ENZ) (“Enzo” or the “Company”), today
announced that a leading proxy advisory firm, Glass, Lewis & Co. (“Glass Lewis”), has recommended that shareholders
vote on the BLUE proxy card in support of HDF’s two highly-qualified independent nominees, Fabian Blank and Peter Clemens.
In its report, Glass Lewis highlighted the need for change
at Enzo and the pervasive weakness of the arguments the Company has made throughout its campaign1:
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“[W]e are ultimately inclined to conclude Harbert…submits
the much stronger fundamental case.”
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“This is predicated on what we consider to be entirely
legitimate concerns around strategy and shareholder value, as well as the board's failure to produce arguments that
meaningfully update its own dated case from late 2015.”
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“We believe the continued presence of routine opposition
to the incumbent board by a rotating cast of dissident shareholders suggests there may be some foundational and atypical disconnect
between the Company and investors.”
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“Disconcertingly, investors hoping to see a bold response
steeped in critical measures of operational progress have instead been greeted by what we consider to be a fairly loosely structured
narrative functionally ripped from Enzo's last battle, including rehashed promises of pending value generation.”
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“Thus, in lieu of simply maintaining the status quo,
we consider unaffiliated investors have been afforded a reasonable opportunity to advance credible, incremental change,
in each case without introducing any substantive risk of unilateral influence or materially eroding Enzo's aggregate knowledge
base.”
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1 Permission
to quote Glass Lewis neither sought nor obtained. Emphasis added.
Glass Lewis also carefully examined Enzo’s
performance against peers across various periods, concluding that:
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“On balance, we consider the yield on our review is fairly
straightforward…the Company has underperformed every benchmark over every period, in all cases by no less than
roughly 32%.”
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“We believe this suggests Enzo's misses against suitable comparators
have been fundamental and expansive, and that there is little credible capacity to suggest the Company has generated
stable, attractive value…”
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Regarding Enzo’s lack of strategic and operational
progress, Glass Lewis notes that:
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“We are thus concerned Enzo is more focused on framing the current
contest as an existential threat to perpetually unattained value-in-potentia, seemingly in lieu of demonstrating clear cause
for continued operational goodwill among investors who have suffered expansive losses during the tenure of the bulk of the existing
board.”
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“[W]e consider Enzo has, in fact, employed a strategy which has
done little to stanch losses in revenue, which, for FY2019, declined to the lowest annual level since FY2008.”
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“[W]e do not consider this unbiased assessment of historical
performance suggests Enzo is operationally trending the right direction or that management and the board have fulfilled their late
2015 promise that the Company was ‘positioned to thrive now’.”
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Glass Lewis discusses Enzo’s corporate governance
issues and the reactive nature of the actions the Company has taken, noting:
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“[T]here remain a raft of other governance factors that we consider
reflect poorly on Enzo and the board's general willingness to undertake proactive -- as opposed to reactive -- change.”
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“[W]hile we further note no clear opposition from Harbert in
relation to Ms. Fischer -- we consider the resulting agenda modification nevertheless represents a decidedly dubious late-stage
complication in the context of a contested solicitation.”
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Referring to the separation of the president and CFO roles, Glass Lewis
notes, “the relatively uncontroversial nature of the change suggests this represents another low risk, high optical
upside modification intended to cultivate a more favorable impression of Enzo's governance.”
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Finally, in discussing HDF’s nominees, Glass Lewis
states:
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“Speaking first to Fabian Blank, we identify a reasonable health
care services background, including what appears to be a breadth of advisory roles spanning varying industry segments and geographies.”
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“In contrast, the board's criticism of Mr. Blank -- which highlights
GHG's microcap status despite the fact that it is worth nearly twice as much as Enzo and seemingly pleads for guilt by association
by repeatedly referencing a thirty-years out-of-date association between Georgia and the former Soviet Union -- is, in our view,
entirely unconvincing.”
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“Peter Clemens, in turn, has a background which includes c-suite
roles at several healthcare services firms, including Surgical Care Affiliates and Caremark Rx, Inc.”
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“The presence of this senior executive experience at a range
of larger and more complex enterprises in the healthcare sector supports Mr. Clemens' prospective ability to add value to a
range of key strategic and financial discussions and overrides, in our view, nominal concerns that Mr. Clemens has not previously
served on the board of a publicly-traded firm.”
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Kenan Lucas, Managing Director and Portfolio Manager of
HDF, commented on the report: “We are extremely pleased that Glass Lewis has supported our case for change at Enzo. HDF believes
the Company’s pattern of prioritizing the entrenched status quo over its fiduciary duty to shareholders is no longer acceptable.
Our two independent nominees, Fabian Blank and Peter Clemens, will provide the relevant skillsets and expertise required to help
realize Enzo’s value potential. We look forward to continuing constructive engagement with the Board and management on the
path to improvement at Enzo.”
Now is the time to vote your shares. HDF, like Glass Lewis,
encourages you to vote on the BLUE proxy card FOR the election of Fabian Blank and Peter Clemens today.
Please visit our website at www. cureenzo.com to learn more.
Important Information about Participants in a Proxy Solicitation:
Harbert Discovery Fund, LP (“Harbert Discovery”),
Harbert Discovery Fund GP, LLC (“Harbert Discovery GP”), Harbert Discovery Co-Investment Fund I, LP (“Harbert
Discovery Co-Investment” and together with Harbert Discovery, the “Discovery Funds”), Harbert Discovery Co-Investment
Fund I GP, LLC (“Harbert Discovery Co-Investment GP”), Harbert Fund Advisors, Inc. (“HFA”), Harbert Management
Corporation (“HMC”), Jack Bryant (“Mr. Bryant”), Raymond Harbert (“Mr. Harbert”) and Kenan
Lucas (“Mr. Lucas” and together with Harbert Discovery, Harbert Discovery GP, Harbert Discovery Co-Investment, Harbert
Discovery Co-Investment GP, HFA, HMC and Messrs. Bryant and Harbert, the “Harbert Discovery Parties”) (collectively,
the “Participants”) have filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy
statement and accompanying form of proxy to be used in connection with the solicitation of proxies from the shareholders of Enzo
Biochem, Inc. (the “Company”) in connection with the annual meeting of shareholders of the Company (the “Annual
Meeting”). All shareholders of the Company are advised to read the definitive proxy statement and other documents related
to the solicitation of proxies by the Participants in respect of the Annual Meeting, as they contain important information, including
additional information related to the Participants, their nominees for election to the board of directors of the Company and the
Annual Meeting. The definitive proxy statement and an accompanying proxy card will be furnished to some or all of the Company’s
shareholders and are, along with other relevant documents, available at no charge on the SEC website at http://www.sec.gov/ and
are available upon request from the Participants’ proxy solicitor, Okapi Partners, by calling (888) 758-6707 (banks and brokers
call collect (212) 297-0720).
Additional information about the Participants can be found
on the Definitive Proxy Statement filed by the Participants on December 6, 2019.
About Harbert Discovery Fund (HDF)
HDF invests in a concentrated portfolio of publicly traded
small capitalization companies in the US and Canada. We perform significant due diligence on each portfolio company prior to investing.
In addition to researching all publicly available information and meeting with management, our diligence includes substantial primary
research with industry experts, consultants, bankers, customers and competitors. We often spend months or years researching ideas
before making an investment decision and we only invest in companies that we believe are significantly undervalued, and where there
is the potential for change to enhance or accelerate value creation. In an effort to unlock this potential value, we seek to work
directly with the boards and management teams of our portfolio companies privately and collaboratively, engaging with them on a
range of factors including governance, board composition, corporate strategy, capital allocation, strategic alternatives and operations.
We have effected positive, fundamental changes at our current and past investments through this behind-the-scenes, constructive
approach. HDF currently has board representation at three of our portfolio companies. In each case, changes to the board were agreed
upon privately and it is our strong preference in every investment to avoid the unnecessary distractions and costs of a public
proxy campaign.
About Harbert Management Corporation (HMC)
HMC is an alternative asset management firm with approximately
$7.0 billion in regulatory assets under management as of December 31, 2019. HMC currently sponsors nine distinct investment strategies
with dedicated investment teams. Additional information about HMC can be found at www.harbert.net.
Contacts
Investor Contact
Okapi Partners LLC
Bruce Goldfarb / Chuck Garske / Jason Alexander, 212-297-0720
info@okapipartners.com
Media Contact
Sloane & Company
Dan Zacchei / Sarah Braunstein, 212-486-9500
dzacchei@sloanepr.com /
sbraunstein@sloanepr.com
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