A financial services company says an investment firm that is trying to oust 3 of its directors is short on new ideas.
Dona Young, chairman of the Phoenix Companies Inc., Hartford, and Peter Browning, chairman of the Phoenix board’s executive committee, make that case today in a letter urging shareholders to reject the 3 board candidates nominated by Oliver Press Partners L.L.C., New York.
Oliver Press, which owns about 5% of the stock of Phoenix, says Phoenix should cut expenses, sell its asset management unit, do more with its closed block of business, and take other steps to improve shareholder value.
“Now is not the time to interrupt our progress or jeopardize our business relationships, policyholder interests, and the long-term interest of our shareholders,” Young and Browning write in the letter.
Since 2003, the Phoenix board has generated 17% compound annual growth in earnings per share, trebled life insurance sales and cut the company’s expenses, Young and Browning write.
The company also is preparing for the spin-off of its asset management business, Young and Browning write.
Meanwhile, Young and Browning write, “we believe that Oliver Press has not offered any new ideas to create shareholder value that your board has not already considered.”
Oliver Press has proposed $90 million in additional expense reductions, Young and Browning note.
Phoenix cut operating expenses $108 million between 2004 and 2006, and it already has plans to make additional cuts this year, Young and Browning write.
The proposed $90 million cut “is unrealistic and would threaten to disrupt the very foundation of our business,” Young and Browning said.
Moreover, the proposals to take aggressive steps to strengthen the business “are creating concern among our key business partners,” Young and Browning write.