Urges Shareholders to Visit www.FixNTP.com
to Support Request for a Special Meeting, Which Requires Support
From Investors Collectively Holding 30% of the Company’s
Outstanding Shares
Special Meeting Would Provide Shareholders
an Opportunity to Reconstitute Nam Tai’s Board by Voting to Remove
a Majority of the Incumbents and Voting to Add Six Highly-Qualified
Individuals
Six-Member Slate Assembled by IsZo Possesses
Deep Real Estate Expertise, Extensive Experience Operating in
China, Proven Management and Board Service Pedigrees, and Strong
Capital Allocation and Transaction Acumen
Warns Nam Tai’s Leadership to Not Take Any
Near-Term Actions to Entrench the Incumbents or Undermine
Shareholders’ Rights and Ability to Facilitate Necessary
Board-Level Change
IsZo Capital Management LP (together with its affiliates,
“IsZo”), a significant long-term shareholder of Nam Tai Property
Inc. (NYSE: NTP) (“Nam Tai” or the “Company”) with beneficial
ownership of approximately 9.8% of the Company’s outstanding
shares, today issued a letter to shareholders seeking support to
convene a meeting of Nam Tai shareholders (the “Special Meeting”).
IsZo is seeking to convene the Special Meeting for the purpose of
providing shareholders an opportunity to reconstitute Nam Tai’s
Board of Directors by removing a majority of the incumbent
directors and installing six highly-qualified and independent
individuals: Michael Cricenti, Cindy Chen Delano, Bo Hu, Louis
Leung, Paula J. Poskon and Jeffrey Tuder.
We encourage shareholders to visit www.FixNTP.com to meet our
slate and learn how to support our request for the Special Meeting.
Shareholders can also e-mail the name of their brokerage firm and
the number of shares they own to IsZo’s solicitor, Saratoga Proxy
Consulting at info@saratogaproxy.com, or call (212) 257-1311.
IsZo’s solicitor will provide Nam Tai shareholders with specific
instructions on how they and their broker can execute a written
request to call the Special Meeting.
The full text of today’s letter is below.
***
July 20, 2020
Dear Fellow Shareholders,
IsZo Capital Management LP (together with its affiliates,
“IsZo”) is a significant long-term shareholder of Nam Tai Property
Inc. (NYSE: NTP) (“Nam Tai” or the “Company”). We continue to
believe there is an urgent need for change atop Nam Tai in light of
its dismal corporate governance, perpetual boardroom conflicts,
poor financial performance and value-destructive capital allocation
decisions. Since Kaisa Group Holdings Ltd. (together with its
affiliates, “Kaisa”) began taking control of Nam Tai in late 2017,
the best interests of shareholders have been consistently
disregarded by management and the Board of Directors (the “Board”).
Kaisa’s unrelenting focus on its own interests above all else has
destroyed nearly 70% of Nam Tai’s market capitalization and left
the Company without any strategic direction or credible plan for
enhancing shareholder value.1
In light of the dire situation at Nam Tai, we are seeking
shareholder support to demand that Nam Tai convene a meeting of the
Company’s shareholders (the “Special Meeting”), whereat
shareholders could vote to:
- Remove five of the incumbent directors (Ying Chi Kwok, Dr. Wing
Yan “William” Lo, Vincent Fok, Professor Si Zong Wu and Dr. Aiping
Lyu), and any new director(s) appointed by the Board since the
conclusion of the 2020 Annual General Meeting of Shareholders, from
the Board; and
- Appoint IsZo’s six highly-qualified and independent director
candidates (Michael Cricenti, Cindy Chen Delano, Bo Hu, Louis
Leung, Paula J. Poskon and Jeffrey Tuder) to the Board.
Convening a Special Meeting requires the support of shareholders
collectively holding 30% of Nam Tai’s outstanding shares. We urge
shareholders interested in supporting our request for a Special
Meeting to immediately visit www.FixNTP.com or promptly contact
Saratoga Proxy Consulting at info@saratogaproxy.com or (212)
257-1311 with the name of your brokerage firm and the number of
shares you own. Saratoga Proxy Consulting will provide Nam Tai
shareholders with specific instructions on how they and their
broker can execute a written request to call the Special
Meeting.
THE CASE FOR SIGNIFICANT CHANGE IS CLEAR:
NEW LEADERSHIP IS NEEDED TO ADDRESS THE GLARING GOVERNANCE,
FINANCIAL AND STRATEGY ISSUES AT NAM TAI
We believe Nam Tai’s current leadership is unwilling to divorce
itself from conflicts and incapable of taking the right steps to
unlock the intrinsic value of the Company’s assets. The same
individuals that have consistently put their own interests above
those of shareholders cannot be counted on to unwind Nam Tai’s web
of value-destructive issues, including:
- Deficient Corporate Governance Under Kaisa: Kaisa, which
is a conflicted minority shareholder, has packed the Board and
management team with allies and family members. Not only did
Kaisa’s Chief Executive Officer install his younger brother – Ying
Chi Kwok – as Nam Tai’s Chairman and Chief Executive Officer, but
more than half of the Company’s Board members are directly
affiliated with Kaisa or the Kwok brothers. Shareholders should not
forget that the Kwok brothers have a troubling track record. In
2015, Kaisa’s share price plummeted as the Shenzhen government
froze its assets, resulting in a delisting from the Hong Kong
exchange and the Kwok brothers fleeing to Hong Kong to escape
detention by the People’s Republic of China. We believe a reconstituted Board with demonstrated
integrity will be able to eradicate the nepotism that pervades Nam
Tai today.
- A Controversial, Unengaged Chief Executive Officer: Ying
Chi Kwok has failed to engage in any substantive manner with Nam
Tai shareholders since becoming Chief Executive Officer in 2018.
Mr. Kwok has not held a single conference call, engaged with
sell-side analysts or presented in any public forum. To our
knowledge, Mr. Kwok has seldom, if ever, visited the Company’s
headquarters and properties. We believe that Mr. Kwok should be
made to answer to shareholders for his delinquent performance and
failure to deliver any credible plan for enhancing value.
We believe a reconstituted Board and
qualified executive leadership team will be far better positioned
to rebuild credibility with shareholders and put forth a viable
corporate strategy.
- Chronic Financial Underperformance: Nam Tai has produced
negative total shareholder
returns (“TSR”) over every relevant time horizon, including
one-year (-58.96%), three-year (-43.75%) and five-year (-9.68%)
periods.2 The Company’s TSR during Ying Chi Kwok’s disastrous,
multi-year tenure as Chief Executive Officer is a comparably
abysmal (-56.85%).3 We believe reconstituting
the Board and removing Kaisa insiders from leadership roles at Nam
Tai is the only way to end this dangerous and destructive
tailspin.
- A Concerning History of Related-Party Transactions:
Since Kaisa essentially took control of Nam Tai (without paying any
premium), the Company has engaged in a startling number of
related-party transactions. Multiple years of self-dealing has
resulted in at least $2.5 million in questionable transactions.
We believe a reconstituted Board that
includes proven public company directors and talented legal experts
will be able to investigate the full scope of Kaisa’s self-dealing
and establish clear guardrails to prevent similar value erosion
moving forward.
- Egregious Strategic Missteps: Despite dramatic share
price underperformance and shareholder outrage over related-party
transactions, the incumbent Board has been rubberstamping a
misaligned capital allocation approach. Nam Tai recently announced
its intent to pursue an illogical and opaque acquisition strategy
without conveying any detail to shareholders regarding anticipated
costs, expected returns or the Company’s investment criteria. In
keeping with its disregard for shareholder communication and
transparency, the Company revealed in a single, buried sentence in
its March 2020 20-F filing that it purchased a $101 million site
for residential development in Dongguan City. This purchase used
more than 80% of the Company’s available cash and represents more
than a third of Nam Tai’s market capitalization. We believe a reconstituted Board that includes our
six-member slate will be able to veer off of this disastrous path,
while avoiding dangerous debt and preserving the underlying
intrinsic value of revenue-generating projects.
THERE IS AN EXPEDITED PATH TO FIX NTP:
RECONSTITUTE THE COMPANY’S BOARD WITH THE ISZO SLATE
IsZo has spent the past two months identifying and recruiting a
world-class group of director candidates with deep real estate
expertise, extensive experience operating in China, proven
management and board service pedigrees and strong capital
allocation and transaction acumen. Our six-member slate has already
begun working to establish a comprehensive plan for improving
governance, ending conflicts and self-dealing and implementing a
disciplined capital allocation approach and structured portfolio
optimization process that can help shareholders realize the
intrinsic value of Nam Tai’s assets. By adding our director
candidates to the Board alongside current directors Peter R.
Kellogg and Mark Waslen, Nam Tai can finally benefit from a
diverse, independent and qualified Board that is well-positioned to
recruit a new management team and set a fresh strategic
direction.
Our six highly-qualified and independent director candidates
are:
- Michael Cricenti is the Managing Member and Chief
Investment Officer of Magis Capital Partners, a private investment
firm that periodically invests in real estate investment trusts
(“REITs”) with underlying holdings across various commercial
property sub-sectors. Since 2017, Mr. Cricenti has also served as a
Senior Advisor at IsZo, where he advises the firm on its
investments in real estate securities and the REIT sector. From
2009 through 2016, Mr. Cricenti served as Managing Director at
Bluestem Asset Management, an investment firm with approximately
$1.5 billion in assets. Mr. Cricenti’s responsibilities at Bluestem
included leading the sourcing, research and execution of
investments in public, private and partnership securities,
including real estate companies and securities. Mr. Cricenti began
his career as a mergers and acquisitions analyst at Harris Williams
& Co., a leading middle-market advisory firm. Mr. Cricenti
holds a Bachelor of Science in Business Administration with a
concentration in finance and quantitative methods from Babson
College.
- Cindy Chen Delano is a Partner and the Head of
Litigation and Legal Strategy at Invictus Global Management, an
alternative asset management firm based in Austin, Texas. Ms.
Delano has vast legal expertise when it comes to complex
cross-border transactions and investments, having held various
positions at firms such as Whitebox Advisors, a $5 billion global
asset manager, and AIG Investments, the investment management arm
of American International Group (NYSE: AIG). Previously, Ms. Delano
served as an attorney specializing in business finance and
restructuring at Weil, Gotshal & Manges and actively practiced
through 2013 at firms that included Kirkland & Ellis and
Milbank. Ms. Delano holds a Bachelor of Arts from New York
University and received her Juris Doctor from St. John’s University
School of Law, graduating magna cum laude from both. Ms. Delano
also previously served as an adjunct professor at the University of
Minnesota Law School.
- Bo Hu is the Managing Director at Edge Principal
Advisors, a multi-strategy real estate investment firm. He served
as a Vice President at the firm from 2013 through 2016 and
originally joined as an Associate in 2010. From 2009 through 2010,
Mr. Hu was an Associate in the Real Estate Acquisitions Group at
Five Mile Capital Partners, an alternative investment and asset
management company, where he was actively involved in real estate
transactions across all levels across the capital structure. Mr. Hu
began his career in 2007 as an Analyst in the Global Commercial
Real Estate Investment Banking Group at Merrill Lynch & Co., a
leading wealth management, capital markets and advisory company.
Mr. Hu graduated as a Sommerfeld Scholar from the University of
Texas at Austin with both a Master of Science and Bachelor of
Science in Accounting.
- Leung Lin Cheong Louis (Louis Leung) is the Managing
Director of Capital BR International Ltd., a private investment
firm that he founded in 2017 after spending decades as a manager of
real estate developments. Prior to founding his own firm, Mr. Leung
served as Managing Director of the Retail Asset Management
Department of Ping An Real Estate Company Ltd., a Chinese real
estate developer. Throughout his extensive career, Mr. Leung has
held a number of senior roles focused on property development at
leading real estate funds, including as Managing Director of Real
Estate Development at Van Shung Chong Holdings Limited in Shanghai
from 2007 to 2013 and as Executive Director at the large investment
and property developer, Shanghai Cross Ocean Property Development
Co. Ltd. from 2006 to 2007. Mr. Leung began his career in the real
estate industry in the Hong Kong office of Jones Lang Wootton
(NYSE: JLL). Mr. Leung previously served as a director of the
Property and Construction Services Group of the Hong Kong General
Chamber of Commerce and has served on various other private boards
of directors. He received his Master of Science degree from The
Hong Kong Polytechnic University.
- Paula J. Poskon is the founder and President of STOV
Advisory Services, which offers professional consulting and
advisory services to company executives and institutional investors
in the areas of real estate, capital markets, investor relations
and diversity and inclusion. From 2014 through 2015, Ms. Poskon
served as Senior Vice President/Senior Real Estate Research Analyst
at D.A. Davidson & Co., where she was tasked to co-lead the
launch of its real estate capital markets platform. Ms. Poskon was
a Director and Senior Equity Research Analyst in Real Estate at
Robert W. Baird & Co. from 2005 through 2014. Ms. Poskon was
named No. 3 on The Wall Street Journal’s “Best on the Street” among
real estate analysts for 2009 and No. 2 among real estate analysts
for stock-picking in 2011 by StarMine. Ms. Poskon currently sits on
the Board of Directors of Wheeler Real Estate Investment Trust
(NASDAQ: WHLR), a fully-integrated, self-managed commercial real
estate investment company that owns, leases and operates
income-producing retail properties. Ms. Poskon graduated from the
Wharton School at the University of Pennsylvania with a Bachelor of
Science in Economics with a concentration in Accounting and a
Master of Business Administration in Finance with a concentration
in Strategic Management.
- Jeffrey Tuder is the Managing Member of Tremson Capital
Management, a private investment firm he founded focused on
identifying and investing in securities of undervalued
publicly-traded companies. From 2012 through 2015, Mr. Tuder held
positions at investment advisors that primarily invest in
undervalued securities, including serving as the Director of
Research for KSA Capital Management and as a Senior Analyst at JHL
Capital Group. Mr. Tuder fostered his financial analysis and
capital allocation expertise during his tenure as Managing Director
of Special Situations at CapitalSource Finance (formerly NYSE:
CSE), a publicly-traded commercial finance company until its
acquisition by PacWest Bancorp. Mr. Tuder also has many years of
experience as an investor and financial analyst at firms such as
Fortress Investment Group (formerly NYSE: FIG). Mr. Tuder currently
serves on the Board of Directors of Inseego (NASDAQ: INSG),
SeaChange International (NASDAQ: SEAC) and Unico American (NASDAQ:
UNAM). Mr. Tuder previously served as a director of MRV
Communications (formerly NASDAQ: MRVC). He has also served as a
director of several privately held companies across multiple
industries. Mr. Tuder earned his Bachelor of Arts from Yale
University.
WE URGE SHAREHOLDERS TO SUPPORT THE CHANGE
NEEDED AT NAM TAI BY EXECUTING A WRITTEN REQUEST FOR A SPECIAL
MEETING
The time to fix Nam Tai is now – together shareholders can put
an end to further value-destructive acquisitions and costly
self-dealing at the Company. We firmly believe overhauling Nam
Tai’s Board and management team is the only way to ensure
shareholders’ best interests are finally prioritized and that the
value of the Company’s underlying assets is ultimately realized. If
the incumbent Board tries to undermine corporate democracy in the
days to come by announcing cosmetic changes or tendering for
shares, we believe it will only reinforce shareholder sentiment
that Nam Tai’s leaders are focused on self-preservation and
enriching themselves above all else.
We encourage shareholders to immediately visit www.FixNTP.com to
obtain instructions to execute a written request for the Special
Meeting. While we advise Nam Tai’s leaders to avoid taking any
steps that undermine shareholders’ rights to elect directors of
their choosing at a Special Meeting, the risks associated with
Kaisa’s control of the Company grow each day. This is why we are
asking shareholders to promptly act to help us reach the 30%
support threshold for a Special Meeting.
We look forward to your support.
Sincerely,
Brian Sheehy IsZo Capital Management LP
***
As a shareholder and owner of Nam Tai, your
support is crucial. Together, we can Fix Nam Tai.
We urge shareholders to contact Saratoga
Proxy Consulting at info@saratogaproxy.com or (212) 257-1311 with
the name of your brokerage firm and the number of shares you own.
Saratoga will provide you with specific instructions on how you and
your broker may execute a written request to call the Special
Meeting.
***
1 Nam Tai’s share price was $13.00 as of the close of trading on
January 29, 2018 (the day Ying Chi Kwok was appointed Chief
Executive Officer) and the Company’s share price was $4.05 as of
the close of trading on May 26, 2020 (the day before IsZo issued
its first public communication to shareholders). 2 TSR figures
account for dividends reinvested and run through the close of
trading on May 26, 2020 (the day before IsZo issued its first
public communication to shareholders). 3 TSR figure accounts for
dividends reinvested and runs from the close of trading on January
29, 2018 (the day Ying Chi Kwok was appointed Chief Executive
Officer) to the close of trading on May 26, 2020 (the day before
IsZo issued its first public communication to shareholders).
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For Investors:
Saratoga Proxy Consulting LLC John Ferguson / Joe Mills,
212-257-1311 jferguson@saratogaproxy.com /
jmills@saratogaproxy.com
For Media:
Profile Greg Marose / Charlotte Kiaie, 347-343-2999
gmarose@profileadvisors.com / ckiaie@profileadvisors.com
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