13D Weekly Report - Mar 18, 2024 to Mar 22, 2024

Key Summary:  On March 18, 2024, CLS Therapeutics, LLC, holding a 14% stake, sent a letter to the board's Corporate Secretary expressing dissatisfaction with the current management.

Market Cap: $7 million | Xenetic Biosciences, Inc., a biopharmaceutical company, focuses on advancing XCART, a personalized chimeric antigen receptor T cell (CAR T) platform technology engineered to target patient-specific tumor neoantigens.

On March 18, 2024, CLS Therapeutics, LLC (14%) expressed its dissatisfaction with the management in a letter to the Corporate Secretary for the board of directors. This letter followed the stockholders' vote on December 6, 2023, which opposed the compensation of the Company’s named executive officers. CLS Therapeutics' concerns with the current management prompted them to call for changes in the senior management. Source

Engine Capital Nominates Two Candidates to MRC Global’s (MRC) Board

Key Summary: On March 19, 2024, Engine Capital announced its nomination of two candidates, Brad Favreau and Daniel Silvers, for election to the Board at the 2024 Annual Meeting.

Market Cap: $1 billion | MRC Global is global distributor of pipe, valves, fittings (PVF) and other infrastructure products and services to diversified end-markets including the gas utilities, downstream, industrial and energy transition, and production and transmission infrastructure sectors.

On March 19, 2024, Engine Capital (4.3%) announced its nomination of two candidates, Brad Favreau and Daniel Silvers, for election to the Board at the 2024 Annual Meeting. Engine highlighted MRC's struggles as a public company, including underperformance compared to competitors, unresolved disputes with preferred stockholders, and concerns about its M&A strategy under CEO Rob Saltiel. Source

Blackwells Capital Pushes for Governance Reform and Board Restructuring at Braemar Hotels & Resorts (BHR)

Key Summary: On March 22, 2024, Blackwells Capital LLC, along with its affiliates and Jason Aintabi, solicit support from stockholders for significant changes at the upcoming 2024 Annual Meeting.

Market Cap: $164 million | Braemar Hotels & Resorts Inc. is a real estate investment trust (REIT) focused on investing in luxury hotels and resorts.

On March 22, 2024, Blackwells Capital LLC, along with its affiliates and Jason Aintabi, solicit support from stockholders for significant changes at the upcoming 2024 Annual Meeting. The changes proposed are aimed at aligning the corporation's governance policies and board composition more closely with all stockholders' best interests. This effort is encapsulated in the Proxy Statement and involves the election of four Blackwells nominees — Michael Cricenti, Jennifer M. Hill, Betsy L. McCoy, and Steven J. Pully — to the board for one-year terms. Additionally, Blackwells proposes several governance changes:

o Removing the Bylaws' Overreaching Advance Notice Provision.

o Preventing any current/former employee, director, officer, or control person of the Corporation or its affiliates from serving as chairman of the Board.

o Disclosing all extraordinary transaction proposals received in the past two years and their terms.

o Disclosing all compensation paid to the Bennett family, The Dallas Express, and its employees, directors, or agents.

Source

ONGOING

Stilwell seeks votes for his election to the ICC Holdings (ICCH) Board

Key Summary:  On March 6, 2024, Stilwell issued a Proxy Statement and a GREEN universal proxy card to shareholders, seeking their votes to elect Joseph D. Stilwell to the Company's Board of Directors at the 2024 Annual Meeting.

Market Cap: $47 million | ICC Holdings, Inc., together with its subsidiaries, provides property and casualty insurance products to the food and beverage industry in the United States.

Background

On March 6, 2024, Stilwell (9.71%) distributed a Proxy Statement and a GREEN universal proxy card to shareholders, seeking their votes at the 2024 Annual Meeting of Shareholders to elect himself to the Company's Board of Directors. Source

Update

On March 18, 2024, Stilwell filed proxy materials seeking support for him at the upcoming AGM.

Past

On December 28, 2020, Joseph Stilwell disclosed a 5.6% active stake in the company and stated that he hopes to work with management and the board to improve capital allocation and profitability at the company. Source

Starboard nominated Board candidates to Alight Inc (ALIT)

Key Summary: On Feb 16, 2024, Starboard nominated Board candidates to Alight Inc

Market Cap: $5 billion | Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide.

Background

On February 16, 2024, Starboard (7.8%) delivered a letter to the company nominating a slate of director candidates, including Keith D. Dorsey, Matthew C. Levin, Gavin T. Molinelli and Coretha Rushing, for election to the Board at the 2024 AGM. Source

Update

On March 15, 2024, Starboard (7.3%) notified the company of its nominees for the upcoming 2024 AGM in accordance with Federal Universal Proxy Rules. Starboard intends to solicit proxies for the election of Keith D. Dorsey, Matthew C. Levin, and Coretha Rushing as nominees to the Board, with Gavin T. Molinelli designated as an alternate nominee if needed.

Erez Asset Management nominated Board candidates to Whitestone REIT (WSR)

Key Summary: In March 7, 2024, Erez Asset Management plans to nominate two Board candidates at Whitestone's 2024 annual meeting. They urge shareholders to question management on underperformance, rejected buyout offers, asset sales, high costs, excessive debt, and lack of board experience. KBS Strategic Opportunity REIT aimed to align interests in mid-2017, increasing stake to 9.36% by December 2017. Despite unsuccessful board nominations, their proposal to declassify the board passed in May 2018.

Market Cap: $603 million | Whitestone REIT is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio.

Background

On March 7, 2024, Erez Asset Management stated its plans to nominate two candidates for the Board at the 2024 annual meeting. They highlighted Whitestone's underperformance and urged shareholders to question management during a conference call, focusing on issues like rejecting a premium buyout offer, value-destructive asset sales, high public company costs, excessive debt levels, and the board's lack of relevant experience. Source

Update

On March 19, 2024, Erez Asset Management nominated two candidates for election to the Board at the 2024 AGM.

Past

In mid-2017, KBS Strategic Opportunity REIT disclosed a 7.1% stake and aimed to align management and shareholder interests by discussing changes to compensation. By December 2017, their stake rose to 9.36%, prompting a notice to nominate trustees and propose declassifying the Board. They filed proxy materials in March and April 2018, urging support for their nominees and proposals. Despite ISS's recommendation, their candidates weren't elected at the May 2018 AGM, but the proposal to declassify the Board passed. By December 2018, KBS reduced its stake to 4.99%.

Iljin SNT Advocates for Management Overhaul and Spending Rationalization at Aurinia Pharmaceuticals (AUPH)

Key Summary: In 2023, Iljin SNT Co., Ltd. expressed its dissatisfaction with the board's composition by advising a "Withhold" vote against several nominees at the AGM. Despite this, all incumbent directors were re-elected. On March 20, 2024, Iljin expressed its concerns by submitting a letter criticizing the management's performance and urging for a management overhaul and spending rationalization.

Market Cap: $743 million | Aurinia Pharmaceuticals Inc., a clinical stage biopharmaceutical company, engages in the research, development, and commercialization of therapeutic drugs for the treatment of various diseases in the United States and China.

Background

On May 10, 2023, Iljin SNT Co., Ltd. (5%) delivered a letter to the board to express its concerns regarding the composition of the board. In the letter, ILJIN advised that it intends to vote “Withhold” against nominees Milne, Hagan, Jayne, Billen, Mackay-Dunn, Leversage and Balakrishnan. Source
At the AGM held on May 17, 2023, shareholders voted to re-elect all the incumbent directors to the Board.

Update

On March 20, 2024, Iljin SNT Co., Ltd. (5.2%) delivered a letter to the management and the Board expressing its concerns regarding the composition of the management team and the company’s continued poor performance. In the letter, ILJIN urged the Board to revamp the management team and to rationalize the Company’s spending.

Past

On June 4, 2019, ILJIN SNT Co., Ltd filed an information circular and letter to shareholders in connection with the upcoming AGM of Aurinia Pharmaceuticals Inc. to be held on, June 26, 2019. ILJIN, a founding shareholder of Aurinia which together with certain affiliates (14%) is seeking support for three nominees for election as directors at the annual meeting. It expressed its belief that the company requires, (i) Embodies corporate governance best practices, rather than flouting them, (ii) Aligns board and executive compensation and expenses with shareholders’ interests, rather than rewarding non-performance, (iii) Demonstrates true independence from one another and management (current and former), rather than looking out for each other first, and (iv) Supports and accelerates the Corporation’s strategy execution, rather than sitting idly by as the Corporation potentially squanders its tremendous opportunity. Source
On June 19, 2019, the company announced that ISS and Glass Lewis recommend shareholders vote for all the company’s nominees at the AGM.
At the AGM held on June 26, 2019, the shareholders of the Company elected all eight of the Company’s director nominees. Also, the company announced that ILJIN SNT Co., LTD (“ILJIN”), provided notice to withdraw the consents of its director nominees prior to the Meeting after having witnessed the strong proxy results in favour of management’s nominees to Aurinia’s Board.

Ancora Details Serious Governance, Process and Competition-Related Issues Stemming from Norfolk Southern’s (NSC) Appointment of John Orr as COO

Key Summary: On February 20, 2024,  Ancora Alternatives nominated 8 candidates for the 2024 AGM. On Feb 22, 2024, Ancora expressed concerns over CEO Alan Shaw's performance and criticized lobbying efforts to protect his position. On Feb 28, 2024, Ancora posted proxy materials to www.movenscforward.com. On Mar 1, 2024, they issued an open letter to the Board Chairman, questioning decisions to raise CEO pay and conduct a negative campaign, urging constructive dialogue, and emphasizing fair elections.

Market Cap: $58 billion | Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States.

Background

On February 20, 2024, Ancora Advisors announced the nomination of eight candidates for election to the Board at the 2024 AGM. Also, it issued an Investor Presentation titled “The Case for Leadership, Safety and Strategy Changes at Norfolk Southern”
On February 22, 2024, Ancora Advisors issued a press release expressing concerns over CEO Alan Shaw's performance and criticized the company's lobbying efforts to protect his position as a top-paid executive.
On February 28, 2024, Ancora Advisors posted its proxy materials to its campaign website at www.movenscforward.com.
On March 1, 2024, Ancora Advisors issued an open letter to the Chairman of the Board expressing concerns over decisions to increase CEO pay and conduct what they perceived as a negative campaign. The letter questioned the board's allegiance to the CEO and urged them to focus on constructive dialogue and value creation. Ancora also highlighted their nomination of director candidates and a proposed management team. They criticized the board's compensation decisions and accused them of engaging in smear tactics. The letter emphasized the importance of a fair and fact-based election contest and invited the board to consider constructive alternatives.

Update

On March 20, 2024, Ancora Advisors criticized the company for hiring COO Mr. Orr in a $25 million deal, arguing it benefited competitors and harmed shareholders. They condemned the lack of a thorough search and shareholder input, highlighting Orr's inexperience and the overlooked candidacy of Jamie Boychuk. Ancora called for leadership changes, accusing the board and CEO of prioritizing self-interest over shareholder value. Source

Elvin Lee and Jerald Hammann Call for Board Overhaul at Salarius Pharmaceuticals (SLRX) Amid Mismanagement Concerns

Key Summary: Elvin Lee and Jerald Hammann criticized Salarius Pharma's board for mismanagement and called for overhaul.

Market Cap: $2 million | Salarius Pharmaceuticals, Inc., a clinical-stage biotechnology company, focuses on developing treatments for cancers with unmet medical need.

Background

On October 27, 2023, Elvin Sanghwan Lee, an Individual Investor (6%) stated that he intends to have discussion with representatives of the management and board relating to improving operational performance and pursuing strategic alternatives, as well as the possibility of management and board representation. Source

Update

On March 20, 2024, Elvin Lee and Jerald Hammann criticized the management and board for mismanaging and failing shareholder interests. They spotlighted unwarranted executive compensation increases and stock grants, notably for CEO David Arthur, amidst the company's poor performance and stock decline. They also challenged the board's claims of cost-saving measures in Arthur's transition to a consultant, which actually increased his compensation. Lee and Hammann condemned the lack of stockholder-aligned incentives and called for a board overhaul, citing a 99% decrease in share value under the current board's tenure. Their attempts to engage with management for improvements were largely ignored, reinforcing their call for new board members aligned with shareholder interests. Source

Starboard Value nominated Board candidates to Algonquin Power & Utilities (AQN.TO)

Key Summary: On July 6, 2023, Starboard urged sale of Algonquin's renewable business to reduce leverage, enhance EPS, and align dividend payout ratio with industry standards. On October 17, 2023, at the Capitalize for Kids Investors Conference, Starboard presented value creation opportunities. On March 21, 2024, it expressed concerns to the Board about its performance, urging fresh perspectives and nominating new director candidates for the 2024 AGM.

Market Cap: $5.6 billion | Algonquin Power & Utilities Corp., a renewable energy and utility company, that provides energy and water solutions and services in North America and internationally.

Background

On July 6, 2023, Starboard (5.1%) delivered a letter to the company stating that a sale of the company's renewable business can help it reduce leverage and provide a safer dividend. Starboard suggests two key objectives: reducing leverage to industry-standard levels of around 5x gross leverage, with excess proceeds used for share repurchases to drive EPS growth, and improving EPS to align with peers, targeting an achievable EPS of 75 cents in FY 2025. By achieving these objectives, Algonquin can enhance its financial position, increase shareholder value, and bring its dividend payout ratio in line with industry standards. It stated that, "For example, if, following the sale of the Renewable Energy Group, Algonquin were to also sell its Water Utility and use the majority of the proceeds to repurchase shares, we believe that it could increase pro forma EPS to nearly 90 cents.
On October 17, 2023, Starboard delivered a presentation at the 2023 Capitalize for Kids Investors Conference highlighting value creation opportunities at the company. It stated its belief that the company is opportunistic even without a sale of renewables.

Update

On March 21, 2024, Starboard delivered a letter to the Board outlining its concerns regarding the current Board of Directors' performance and its impact on the company's strategic direction. Despite some positive changes initiated by the company, such as a CEO change and strategic review, Starboard criticized certain board members for impeding progress and making value-destructive decisions. The letter highlighted the critical juncture Algonquin is facing, including the selection of the next CEO and the potential sale of its Renewable Energy Group. Starboard emphasized the need for fresh perspectives and shareholder-focused directors to evaluate strategic options effectively. As a result, Starboard has nominated a slate of director candidates including Brett C. Carter, Christopher Lopez, and Robert A. Schriesheim for election to the Board at the 2024 AGM. Source

Runa, Smartfin, and Open Ocean Entities oppose K1's Acquisition Proposal for MariaDB (MRDB)

Key Summary: On September 7, 2023, Runa Capital Fund opposed dilutive equity financing, suggested debt options. On September 14, they proposed buying outstanding shares at $0.56/share, offering a $5M bridge loan. On September 20, expressed concern about strategic direction, offered $30M borrowing, demanded answers. On September 24, committed $20M for senior secured notes. On September 28, considered extraordinary general meeting, proposed all-cash offer at $0.56/share. On October 10, issued $26.5M promissory note to RP Ventures LLC, withdrawing acquisition proposal. On March 19, 2024, Runa Entities opposed K1 Investment Management, LLC's proposal to acquire MariaDB plc at $0.55/share.

Market Cap: $14 million| MariaDB plc operates as a cloud database company in North and South America, Europe, the Middle East, Africa, and the Asia Pacific..

Background

On September 7, 2023, Runa Capital Fund (4%) sent a letter to the board expressing opposition to highly dilutive equity financing by the company, citing concerns about substantial dilution to shareholders. They suggested alternative financing options, including debt financing.
On September 14, 2023, Runa Capital Fund proposed buying all outstanding Ordinary Shares not owned by them at $0.56 per share, a 24% premium. They expressed concerns about the company's performance, offered a $5 million bridge loan, and intend to fund the deal with 100% equity. Source
On September 20, 2023, Runa Capital Fund sent a follow-up letter to the company and its directors, expressing concern about the company's strategic direction, mismanagement, and a pending alternative financing option (APT). Runa offered to provide up to $30 million in borrowings, claiming better terms than any other offer, but the board chose an alternative, potentially dilutive, equity issue. Runa demanded answers about this decision and any conflicts of interest, threatening legal action if not satisfied by September 21, 2023. Runa also asked for a copy of an unfiled loan agreement with the European Investment Bank.
On September 24, 2023, Runa Capital Fund, in connection with their proposal to acquire 100% of the Company's issued share capital at $0.56 per share, provided a Commitment Letter. In this letter, Runa Capital Fund II, L.P. committed to provide up to $20.0 million to the Company for senior secured notes.
On September 28, 2023, Runa Capital Fund expressed concerns over management and is considering an extraordinary general meeting to address these issues. They've proposed an all-cash offer to buy MariaDB shares at US$0.56 each. Source
On October 10, 2023, the Company issued a $26.5 million senior secured promissory note to RP Ventures LLC, managed by Michael Fanfant, one of the shareholders in Runa Capital II. In connection with the execution of the Note, Runa Capital II made a statement withdrawing the proposal to acquire the Company. Pursuant to the terms of the Note, Yakov “Jack” Zubarev and Michael Fanfant were appointed to the Board as Class II and I directors, with terms ending at the 2026 and 2024 AGM, respectively. Jack Zubarev is the brother of Ilya Zubarev, a shareholder in Runa Capital II. Source

Update

On March 19, 2024, the Runa Entities, Smartfin Entities, and Open Ocean Entities (collectively 22.9%) opposed K1 Investment Management, LLC's non-binding proposal to acquire MariaDB plc at $0.55 per share. They formed a group to express their opposition, stating it's not in the company's or shareholders' best interests. Source

American Federation of Labor and Congress of Industrial Organizations urged shareholders of Warrior Met Coal (HCC) to back 5 governance proposals

Key Summary: On Feb 29, 2024, AFL-CIO urged shareholders to back 5 governance proposals, including approval for poison pills and golden parachutes.

Market Cap: $3 billion | Warrior Met Coal, Inc. produces and exports non-thermal metallurgical coal for the steel industry.

Background

On February 29, 2024, American Federation of Labor and Congress of Industrial Organizations (the “AFL-CIO”) issued a letter to the shareholders of the company urging them to support five governance proposals, including requiring approval for actions like poison pills and golden parachutes. These changes aim to address underperformance exacerbated by a costly strike in 2021, highlighting the need for improved corporate governance and accountability.

Update

On March 22, 2024, AFL-CIO filed proxy materials urging shareholders to vote for its proposals.

Stilwell seeks votes to elect him to the ICC Holdings' (ICCH) Board

Key Summary:  On March 6, 2024, Stilwell issued a Proxy Statement and a GREEN universal proxy card to shareholders, seeking their votes to elect Joseph D. Stilwell to the Company's Board of Directors at the 2024 Annual Meeting.

Market Cap: $47 million | ICC Holdings, Inc., together with its subsidiaries, provides property and casualty insurance products to the food and beverage industry in the United States.

Background

On March 6, 2024, Stilwell (9.71%) distributed a Proxy Statement and a GREEN universal proxy card to shareholders, seeking their votes at the 2024 Annual Meeting of Shareholders to elect Joseph D. Stilwell to the Company's Board of Directors. Source

Update

On March 18, 2024, Stilwell filed proxy materials seeking support for him at the upcoming AGM.

Past

Trian Fund and Blackwells Capital Nominated Candidates for Disney (DIS) Board

Key Summary:  On Jan 18, 2024, Trian Fund filed proxy materials seeking support for its nominees and proposals.  On Jan 3, 2024, Blackwells nominated 3 board candidates against Trian Fund.

Market Cap: $214 billion | The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide.

Trian Fund

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 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
On December 14, 2023, Trian Fund statd 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. SourceTop of Form
On January 18, 2024, Trian Fund filed proxy materials soliciting votes for several matters, including the election of Nelson Peltz and James (“Jay”) A. Rasulo as directors for one year (Proposal 1), ratification of PricewaterhouseCoopers LLP as independent auditors for fiscal 2024 (Proposal 2), an advisory vote on executive compensation (Proposal 3), approval of an amendment to the 2011 Stock Incentive Plan (Proposal 4), consideration of shareholder proposals on excessive golden parachutes (Proposal 5) and political expenditures (Proposal 6), approval of a resolution repealing certain Bylaws provisions (Proposal 7), and an advisory vote on board size and related vacancies (Proposal 8). Source
On January 22, 2024, Trian Fund stated that it is posting messages on various social media platforms and its website, www.RestoretheMagic.com regarding its proxy solicitation for The Walt Disney Company's 2024 AGM. It stated, "Despite their significant net worth, Disney's non-management directors collectively own less than $15M in $DIS stock. " Source
On March 21, 2024, Former public company directors who have collaborated with Nelson Peltz and Trian sent a letter to the Board praising their constructive approach and ability to enhance shareholder value. Signatories include directors from respected companies, emphasizing Nelson's positive impact in the boardroom. They encourage Disney's Board to work with him for shareholder benefit.
On March 21, 2024, ISS recommended that shareholders vote “FOR” Nelson Peltz and “WITHHOLD” on Maria Elena Lagomasino on Trian’s BLUE proxy card in connection with Disney’s annual meeting on April 3, 2024. Source

Blackwells Capital

On January 3, 2024, Blackwells Capital nominated three candidates for Disney's board of directors, opposing Trian Fund Management's efforts. Blackwells believed that Trian's campaign was disconnected from Disney stakeholders' needs and driven by personal animus. They also expressed concerns about Trian's association with Ancora Holdings Group, requesting a Disney Board investigation. They argued that their candidates complemented Disney's current leadership better than Trian's nominees. Source
On March 4, 2024, Blackwells Capital released its full investor presentation titled “The Future of Disney.”
On March 11, 2024, Blackwells Capital raised concerns about an undisclosed relationship between The Walt Disney Company and ValueAct Capital Management, L.P. It was revealed that ValueAct had been managing Disney's pension fund assets, earning significant fees, while publicly endorsing Disney's board and management. Blackwells questioned the transparency and ethics of the Board's actions, demanding full disclosure of the relationship and related agreements. Despite their demands, the Board denied releasing this information. Blackwells urged fellow shareholders to demand transparency and proposed three qualified nominees for election at Disney's upcoming annual meeting. Source

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