NORCROSS, Ga. (HedgeWorld.com)–Shareholders rejected a plan of dissolution that would have put the remaining assets of Novoste Corp., a medical-technology company, into a liquidating trust.
The rejection is a victory for Steel Partners II LP, an activist hedge fund, which has solicited proxies in opposition to this proposal. Steel Partners’ objection has been that a liquidation would cause the expiration of an asset created by U.S. tax law, Novoste’s net operating loss carryforwards.
Shareholders approved three other proposals, which were not the subject of a proxy contest:
oA proposal to approve an asset sale agreement amongst Novoste, Best Vascular Inc., Fairfax, Va., and Best Vascular’s parent corporation, Best Medical International Inc. According to this agreement Novoste will sell substantially all of the assets of its vascular brachytherapy business to Best Vascular.
oA proposal to change Novoste’s name to NOVT Corporation (or, if that name isn’t available in Florida, where Novoste is incorporated, to NVTE Corporation).
oA proposal to amend the articles of incorporation to reduce the minimum size of the board from six to three.
The defeat of dissolution came despite a recent announcement by the proxy advisory firm Glass Lewis & Co., San Francisco, supporting the management on that point. Glass Lewis said that Steel Partners hadn’t presented any realistic plan that would achieve greater value for the shareholders than the dissolution plan would.
Novoste told shareholders of Glass Lewis’ position on March 3. Two days before, Steel Partners had announced the views of another prominent proxy advisory firm, Institutional Shareholder Services, of Rockville, Md. ISS said that it didn’t believe the dissolution plan merited shareholder support.
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