ISS Recommends Shareholders Vote AGAINST Enzo Proposal to Increase Size of Board
February 19 2020 - 5:16PM
Business Wire
Leading Proxy Advisory Firm Calls Claim by
Enzo’s Board that its Actions are Somehow “Shareholder Friendly” to
be “Not Only Misleading, but Arguably Deceptive.”
ISS Labels Enzo’s Proposal “A Late-Stage
Entrenchment Maneuver” in Response to “Robust Support” for HDF’s
Campaign
ISS Recommends Shareholders Vote on HDF’s BLUE
Proxy Card
HDF Urges Shareholders to Discard Enzo’s Gold
and White Cards
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, Institutional Shareholder Services Inc. (“ISS”), has
recommended that shareholders vote on the BLUE proxy card AGAINST
Enzo’s proposal to amend its bylaws in order to increase the size
of the Board and re-nominate Barry Weiner. Enzo’s delayed 2019
Annual Meeting of Shareholders (the “Annual Meeting”) is scheduled
for February 25, 2020.
The commentary in ISS’s report closely aligns with how HDF has
previously publicly characterized Enzo’s blatant entrenchment
maneuvers. The analysis from ISS speaks for itself, stating1:
- “(A) deeper review reveals modifications that appear to
constitute an eleventh-hour attempt to
salvage a board seat for Weiner in light of what appears to
be strong shareholder support for the
dissident nominees.”
- “(G)iven the timing of the announcement (three days before the
scheduled [Annual General Meeting] and after an apparently strong
showing of support for the dissident nominees), the board's assertion that it is somehow shareholder
friendly is not only misleading, but arguably
deceptive.”
- “Ultimately, it is unclear how this (proposal) would benefit
shareholders.”
- “The proposed increase in board size appears to be a
late-stage entrenchment maneuver in
response to what appears to have been robust
support for the dissident campaign…”
- “(M)oreover, the company has not yet identified any potential
candidates for the proposed seventh director seat. Given that it is
unclear how this would be a net benefit to shareholders, support
AGAINST this proposal is warranted”
- “While independence and diversity are generally beneficial,
shareholders should ask whether they trust
the board to make the selection. After all, this is a board
that is seemingly attempting to circumvent
the will of shareholders and force a unilateral settlement
via this very proposal.”
Kenan Lucas, Managing Director and Portfolio Manager of HDF,
commented on the report: “We are gratified by ISS’s analysis, which
supports in the strongest possible terms what we have said since
Enzo delayed the Annual Meeting: this is a Board willing to go to
any extreme to entrench themselves and attack the rights of its own
shareholders. While we are disappointed by the Board’s actions, we
look forward to the Annual Meeting being held on February 25th,
where the voices of shareholders can finally be heard – and after
which we can all focus on enhancing the value of Enzo and helping
it reach its full potential.”
Now is the time to vote your shares. 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.
1 Permission to quote ISS neither sought nor obtained. Emphasis
added.
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version on businesswire.com: https://www.businesswire.com/news/home/20200219006035/en/
Investors Okapi Partners LLC Bruce Goldfarb / Chuck
Garske / Jason Alexander, 212-297-0720 info@okapipartners.com
Media Sloane & Company Dan Zacchei / Sarah
Braunstein, 212-486-9500 dzacchei@sloanepr.com /
sbraunstein@sloanepr.com
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