13D Weekly Report - Dec 11, 2023 to Dec 15, 2023
Table of contents
Madryn Asset Management Opposes SomaLogic's Proposed Merger with Standard BioTools Inc.
Barington Capital Group Proposes Value-Enhancing Strategy for TriMas Corporation
Engaged Capital's Actions to Enhance Stockholder Value and Governance at PRA Group, Inc
Engine Capital reaches cooperation agreement with Orthofix Medical Inc
180 Degree Capital Urges Declassification of Board at comScore
Paragon Technologies seeks shareholder support at Ocean Power Technologies
Trian Nominates two candidates to the Walt Disney Company Board
INITIATED
Neil S. Subin Announces Activist Investment Stance with Four Director Nominations at Scully Royalty Ltd
Market Cap: $84 million | Scully Royalty Ltd. operates as an iron ore mining company in the Americas, Africa, Canada, Asia, and Europe.
On December 11, 2023, Neil S. Subin (12.4%) stated that he has recently taken an activist investment stance by nominating four director candidates for the upcoming AGM on December 29, 2023. Source
Engaged Capital Commits to Ongoing Engagement with Board and Management for Stockholder Value Maximization
Market Cap: $726 million | Nevro Corp., a medical device company, provides products for patients suffering from chronic pain in the United States and internationally.
On December 11, 2023, Engaged Capital (6%) stated that it has engaged, and intends to continue to engage, in communications with the Board and management team regarding opportunities to maximize stockholder value. Source
Madryn Asset Management Opposes SomaLogic's Proposed Merger with Standard BioTools Inc.
Market Cap: $468 million | SomaLogic, Inc. operates as a protein biomarker discovery and clinical diagnostics company in the United States.
On December 12, 2023, Madryn Asset Management (4.2%) sent a letter to the shareholders regarding the proposed merger of SomaLogic with Standard BioTools Inc. In the letter, Madryn expresses its belief that the proposed merger is not in the best interests of the company's stockholders and solicits proxies from stockholders to vote "AGAINST" the merger at the upcoming Special Meeting scheduled for January 4, 2024. Source
Barington Capital Group Proposes Value-Enhancing Strategy for TriMas Corporation
Market Cap: $1 billion | TriMas Corporation engages in the design, development, manufacture, and sale of products for consumer products, aerospace, and industrial markets worldwide.
On December 12, 2023, Barington Capital Group (1%) sent a letter to TriMas Corporation suggesting to enhance shareholder value by selling Arrow Engine, improving Aerospace performance, and focusing on Packaging as "New TriMas" or pursuing alternatives. It projects a potential $42-$54 per share value increase over three years, a 65%-116% premium to the current share price, and urge the board to consider its proposal.
Engaged Capital's Actions to Enhance Stockholder Value and Governance at PRA Group, Inc
Market Cap: $877 million | PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans in the Americas, Europe, and Australia.
On December 13, 2023, Engaged Capital (5.1%) stated that they are in communication with the board and management to improve stockholder value. It also suggests adding senior personnel and new independent directors for value creation. Source
George Economou Expresses Concerns and Nomination Plans Over Seanergy Maritime Holdings Corp's Management and Governance
Market Cap: $140 million | Seanergy Maritime Holdings Corp., a shipping company, engages in the seaborne transportation of dry bulk commodities worldwide.
On December 13, 2023, George Economou (7.2%) stated his concerns about the management and oversight, especially regarding the alleged issuance of super-voting Series B Preferred Stock to its Chairman and CEO in December 2021, which he believes involved fiduciary duty breaches. He plans to nominate candidates for the board at the next annual meeting when nominations are open. Source
Engine Capital reaches cooperation agreement with Orthofix Medical Inc
Market Cap: $442 million | Orthofix Medical Inc. operates spine and orthopedics company in the United States, Italy, Germany, France, the United Kingdom, Brazil, and internationally.
Background
On November 3, 2023, Engine Capital disclosed a 7.3% active stake in the company and stated that it has engaged, and expect to continue to engage, in discussions with the Board regarding certain governance matters. Source
Update
On December 13, 2023, Engine Capital entered into a Cooperation Agreement with the company and pursuant to it, the company will appoint three new directors to the Board and these new directors will be nominated for election at the 2024 Annual Meeting
ONGOING
180 Degree Capital Urges Declassification of Board at comScore
Market Cap: $62 million | comScore is a cross-platform measurement company that measures audiences, brands and consumer behavior everywhere. comScore completed its merger with Rentrak Corporation in January 2016, to create the new model for a dynamic, cross-platform world.
Background
· On March 6, 2023, 180 Degree Capital Corp (6%) issued a letter to shareholders and employees of the company to express its disappointment in the company's director compensation policy and called on the Board to make a number of corporate governance changes, including, but not limited to, augmenting the compensation policy for those Board members appointed by preferred stockholders, reducing the size of the Board, replacing over-tenured directors, eliminating the Board's classified structure, and providing additional clarity on the Special Dividend Process. As part of these changes, 180 Degree Capital Corp recommended either the immediate resignation of Brent Rosenthal from the Board or, at least, the removal of his position as Lead Independent Director on the Board.
· On April 20, 2023, 180 Degree Capital Corp issued an open letter (refer "Exhibit 2")to the board to express its concerns with certain efforts by the company to pay dividends on the company's Series B Preferred Stock through the issuance of additional Series B Preferred Stock. 180 Degree Capital Corp also requests further reductions in compensation paid to the Board of Directors, the appointment of Jon Carpenter to the, the removal of Brent Rosenthal as Lead Independent Director and that Cerberus, Charter and Liberty Media/Qurate take tangible steps to reverse the destruction in value of common stock since their involvement began in March 2021.
· On May 10, 2023, 180 Degree Capital Corp (6%) issued a press release containing an open letter (refer "Exhibit 3") to the preferred stockholders of the company, Cerberus, Charter and Liberty Media/Qurate. In addition to reiterating concerns detailed in the April Press Release, 180 Degree Capital Corp requested Cerberus, Charter and Liberty Media/Qurate take tangible steps to reverse the destruction in value of company’s common stock since their involvement began in March 2021. 180 Degree Capital Corp also continues to request further reductions in compensation paid to the board, the appointment of Jon Carpenter to the board, the removal of Brent Rosenthal as Lead Independent Director.
· On November 29, 2023, 180 Degree Capital Corp stated that it intends to nominate at least two industry experts for the 2024 Annual Meeting, supporting Ms. Leslie Gillin's continued service on the Board, and nominating Mr. McLaughlin and Mr. Rendino for the other two director seats. Source
Update
On December 11, 2023, 180 Degree Capital submitted a proposal, requesting that the Board take all necessary steps to declassify the Board so that commencing at the 2025 annual meeting of stockholders, directors are elected on an annual basis. Source
Past
§ On September 28, 2017, Starboard (7.2%) entered into an agreement with the company, pursuant to which, the company appointed Wesley Nichols, Paul Reilly and Bryan Wiener to the Board and agreed to appoint an additional independent director recommended by Starboard. On October 16, 2017, Michelle McKenna-Doyle was appointed to the Board as the additional independent appointee. Source
§ On January 16, 2018, the company entered into an agreement with Starboard under which the company:
o issues $150 million in convertible notes to Starboard in exchange for $85 million in cash and $65 million in outstanding common stock, and grants Starboard an option to acquire up to an additional $50 million in convertible notes
o intends to conduct convertible notes rights offering of up to $150 million to all stockholders with $100 million backstopped by Starboard
Paragon Technologies seeks shareholder support at Ocean Power Technologies
Market Cap: $21 million | Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves in North America, South America, Europe, and Asia..
Background
· On July 7, 2023, Paragon Technologies (3.9%) provided a letter to the stockholders with respect to its views regarding the Company’s financial condition and the performance of the board. It expressed its concerns about the company's ongoing cash burn and lack of a coherent plan for profitability. It highlighted the company's history of net losses since its inception in 1994, declining share price, failed commercialization efforts, and high operating expenses. Paragon intends to provide a slate of director nominees with the aim of reducing losses, addressing the cash burn, and implementing a go-to-market strategy to create profitable operations at the company.
· On July 14, 2023, Paragon Technologies (4%) expressed its concerns about alleged wrongdoing and mismanagement by the board and management. It has requested access to the company's records and will pursue litigation if the board does not comply. Furthermore, it stated that it may make binding or non-binding stockholder proposals or may nominate one or more individuals as nominees for election to the board. Source
· On July 17, 2023, Paragon sent an Inspection Demand to the company, requesting access to the company's books and records for the purpose of investigating apparent wrongdoing and/or mismanagement by the Board and/or management. Source
· On July 27, 2023, Paragon filed a complaint in the Delaware Court of Chancery to enforce for inspecting Company's books and records.
· On August 2, 2023, Paragon Technologies, Inc. issued a press release regarding the company, demanding clear explanations from the board on how the company will fund operations beyond July 31, 2024.
· On August 11, 2023, Paragon Technologies (4%) calls on the company to REFRAIN from ALL future equity share sales that will dilute shareholders and immediately announce a significant cost cutting plan to demonstrate the Board’s commitment to protecting shareholder value. Source
· On August 25, 2023, Paragon demands corporate governance adherence and shareholder value enhancement, urging to:
o Reinstate the Company’s bylaws to their original form prior to Paragon’s calling out the Company’s worsening financial performance
o Terminate the Company’s poison pill and grant Paragon its limited waiver
o Allow Paragon, as is Paragon’s right as a shareholder, to examine the Company’s books and records
o Reconstitute its Board to appoint Paragon’s directors to the Company’s Board.
· On August 25, 2023, Paragon Technologies notified its intent to nominate five directors for the company's board at the 2023 annual meeting. On August 29, 2023, Paragon Technologies submitted a second request for an exemption related to the "Section 382 Tax Benefits Preservation Plan" adopted by the company's board on June 29, 2023, limiting ownership to 19.9% of the company's outstanding shares. The company's board has not responded to these exemption requests. Source
· On October 9, 2023, Paragon Technologies stated that it has initiated legal action against the board and CEO for alleged breach of fiduciary duties. They sought to appoint three directors to the board and requested an exemption from poison pill provision. Paragon criticized the management for self-serving actions and misleading statements. Source
· On October 20, 2023, the Delaware Court of Chancery ruled in favor of Paragon Technologies (OTC PINK:PGNT), ordering Ocean Power Technologies (OPT) to provide Paragon with certain books and records for an investigation. Paragon had made a books and records demand on July 17, 2023, which OPT initially refused, leading to litigation. During the trial, Paragon raised concerns about OPT's financial losses, expenses, and director/officer compensation, as well as actions by OPT's board seemingly aimed at interfering with Paragon's efforts to elect new directors. The Court found that Paragon had a credible basis to suspect wrongdoing and rejected OPT's claim of an improper motive for the demand. Sham Gad, Chairman of Paragon, expressed satisfaction with the decision and urged OPT to work constructively with shareholders. Source
· On October 24, 2023, Paragon Technologies sent a letter to the independent directors of the company, raising concerns about recent decisions made by the board. The letter questioned whether the actions taken by the directors are in the best interest of shareholders and suggests that these actions may be aimed at preventing certain director candidates from being presented to shareholders. Paragon highlights several actions, including the adoption of new by-laws, the implementation of a poison pill, engagement of multiple law firms and a proxy defence firm, and the refusal to provide access to company records. Paragon calls for transparency and questions the board's spending decisions in light of OPT's financial situation.
· On November 13, 2023, Paragon Technologies notified the Company that Robert J. Tannor notified them of his withdrawal as a nominee, due to health reasons that he is still recovering from, for election to the Company’s board of directors at the Company’s 2023 AGM. Paragon Technologies intends to proceed to nominate the four other candidates previously notified to the Company. Source
· On November 17, 2023, a Delaware Chancery Court ruling and evidence suggest a gap between OPT's public statements and financial reality. Paragon calls on OPT to implement a substantial cost-cutting plan and cease issuing equity to safeguard shareholder interests. Source
· On November 28, 2023, Paragon Technologies filed proxy materials seeking support for its nominees.
· On November 30, 2023, the Delaware Court of Chancery denied Paragon's request for injunctive relief filed on October 9, 2023. As a result, Paragon's nominations and exemption request remain rejected, and they cannot nominate their candidates for the OPT Board at the 2023 Annual Meeting. Source
· On December 4, 2023, Paragon Technologies stated that it intends to move forward with its election contest at the Company’s 2023 annual meeting of shareholders (scheduled by the Company to be held on January 31, 2024) and intends to nominate its four director candidates at the annual meeting. Source
Update
On December 11, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
Driver Management's Letter Raises Concerns About Insufficient Disclosure in AmeriServ Financial's Form 10-Q Filings
Market Cap: $49 million | AmeriServ Financial, Inc. operates as the bank holding company for AmeriServ Financial Bank that provides various consumer, mortgage, and commercial financial products.
Background
· On January 17, 2023, Driver Management (8.6%) delivered a letter to the company nominating a slate of director candidates: J. Abbott R. Cooper, Julius D. Rudolph, and Mr. Simmons, for election to the Board at the 2023 AGM. Source
· On January 20, 2023, Driver Management delivered a letter to the CEO of the company stating that it is exercising its right to inspect certain books and records and demands to inspect certain documents.
· On March 15, 2023, the company disclosed that Driver management's notice of director candidate nominations is invalid. Source
· On March 16, 2023, Driver Management sent a letter to the counsel of the company regarding the unlawful attempt by the company to prevent Driver's nominees from serving as candidates for election to the board.
· On March 17, 2023, the Company filed a complaint against Driver Management and the Driver Nominees in the Court seeking declaratory judgment that (i) the Company properly rejected Driver Opportunity’s notice of intent to nominate director candidates at the annual meeting, which was submitted on January 17, 2023, and (ii) because of such rejection, Driver has no right to nominate candidates for election to the Board and the defendants have no right to seek election to the board at the annual meeting. Driver reiterates its belief that there is no justification for the conclusions reached by the Company and is committed to defending itself against what it views as, an attempt to prevent it from exercising its rights as a shareholder. Source
· On March 29, 2023, Driver Management filed a complaint in the Court against the Company and the Company’s board of directors. Source
· On May 31, 2023, the company announced that shareholders voted to elect the company’s three director candidates. Source
· On September 7, 2023, Driver Management delivered a letter to the Chairman of the board stating that it intends to nominate J. Abbott R. Cooper for election to the board at the company's 2024 AGM.
· On September 12, 2023, Driver Management delivered a letter to the Company’s counsel regarding a demand made on August 1, 2023, for the company to appoint a special litigation committee (SLC) to investigate alleged breaches of fiduciary duties by current and former members of the board. The demand relates to ongoing litigation preventing shareholders from voting for certain director candidates. Driver Management seeks confirmation of the SLC's appointment, the estimated investigation completion date, and expresses concern about ongoing corporate waste.
· On September 19, 2023, Driver Management sent a letter to the Chairman of the Board, seeking confirmation that its request to inspect specific company records has been denied, as indicated in a previous Rejection Letter from the company.
· On September 25, 2023, Driver Management sent a letter to the Chairman of the Board, expressing frustration with the lack of response to its requests for information regarding company bylaws and director nominations. It highlights the importance of this information for its upcoming director nominations and question the Board's transparency and accountability in light of ongoing legal costs and underperformance.
Update
On December 12, 2023, Driver Management sent a letter to the Chairman of the Board highlighting concerns about insufficient disclosure of material legal proceedings in the company's recent Form 10-Q filings.
Trian Nominates two candidates to the Walt Disney Company Board
Market Cap: $171 billion | The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide.
Background
· On January 12, 2023, Trian Fund filed proxy materials for the election of Nelson Peltz, its CEO and Founding Partner, to the Board at 2023 AGM. Trian believes that Disney’s recent performance reflects the hard truth that it is a company in crisis with many challenges weighing on investor sentiment. While we acknowledge that Disney, like many media companies, is undergoing a challenging pivot to streaming, Disney also benefits from owning best-in-class intellectual property, a more diversified business mix, and a Parks business that is enjoying all-time high profitability. As such, we believe that the Company’s current problems are primarily self-inflicted and need to be addressed immediately, including poor corporate governance, prro strategy and operations and poor capital allocation. Source
· On January 20, 2023, Trian Fund filed proxy materials seeking support for its nominees.
· On January 27, 2023, Trian Fund filed proxy materials seeking support for its nominees.
· On February 2, 2023, Trian Fund issued a press release and a letter to shareholders related to the company, which Trian also simultaneously published to its website, located at www.RestoreTheMagic.com
· On February 9, 2023, Trian Fund congratulated the company on its recently announced operating initiatives, which are a win for all shareholders and broadly align with Trian’s thinking, and, pursuant to which, Trian announced it is withdrawing its nomination of Nelson Peltz to the board of directors of the Company. Source
· On November 30, 2023, Trian Fund stated that it had discussions with Disney's CEO and was offered a meeting with the Board. However, Disney declined Trian's request for Board representation, including Nelson Peltz. Trian expressed disappointment in Disney's performance, citing a loss of around $70 billion in shareholder value since February and underperformance compared to peers and the broader market over the last decade. They believe the recent additions to the Board will not restore investor confidence, and Trian intends to present its case for change directly to shareholders. Source
Update
On December 14, 2023, Trian Fund stated that it intends to nominate two independent director candidates for the Board at the 2024 AGM. Trian believes that Disney has underperformed its potential, with lower earnings per share (EPS) despite significant capital investment and lagging margins in its businesses. Source