NEW YORK (HedgeWorld.com)--The dissidents who've been waging a proxy fight against the board of directors of Computer Horizons Inc., Mountain Lakes, N.J., claimed victory, although there are no official results yet.
The Computer Horizons Full Value Committee said in a statement Tuesday, Oct. 11, the day of a special meeting of shareholders, that based upon its preliminary review of proxies submitted, its full slate of directors has been elected, thereby ousting the entire incumbent board.
The dissident slate consisted of five members instead of the eight on the current board, but the proxy ballots also entailed a vote on the full-value committee's proposal that the size of the board be reduced from eight to five.
The committee also said that it expected the report of the independent inspector of elections to confirm this result within a day. That had not happened as of Friday. Management hasn't responded to requests for comments on the vote. The board adjourned the meeting for one week, which may have the result of delaying official recognition of the result until Tuesday, Oct. 18.
In last Tuesday's statement claiming victory, Eric Rosenfeld, president of the hedge fund Crescendo Partners II, which was the leading force in the creation of the full value committee, said, "We're gratified that Computer Horizons shareholders have replaced the current directors and elected our slate by an overwhelming show of support. We believe that this is a ringing endorsement of our platform."
The statement said nothing more about what makes up that platform, but in its proxy statements Crescendo has called for a renewed focus on the high-margin business segments of the company, a program of cost reduction and the exploration of further strategic options such as a sale, divestment or the use of excess cash to repurchase shares.
If the shareholders have in fact voted out the incumbent board, then in doing so they have overridden the advice of the two independent shareholder advisory firms that have weighed in on the subject in recent days. On Oct. 4, Glass Lewis & Co. of San Francisco recommended a vote in support of the incumbent board.
In its favorable recommendation, Glass Lewis said that Crescendo had failed to present "a well-developed plan ... that clearly offers shareholders a superior value." Furthermore, Glass Lewis was favorably impressed by the incumbent board's decision to retain a new financial adviser and undertake a review of the strategic alternatives available.
The day before, Institutional Shareholder Services announced the same conclusion. It wrote, "On balance, we believe that the current board is acting in the best interests of shareholders. The company has experienced difficult market conditions since 2000, but the company's negative financial and share price performance is comparable to its peers."
In addition to Mr. Rosenfeld, the nominees on the dissident slate include Karl L. Meyer, Robert F. Walters, Frank J. Tanki, and Willem van Rijn.
The stock price since the meeting Tuesday hasn't reflected either market elation or dread over the change of control. The stock (NASD: CHRZ) has spent the week in a trading range between US$4.25 and US$4.05 a share.
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