Successful Proxy Campaign

Challenge

An Israeli-based hedge fund launched a proxy battle to replace the board of an Israeli-based technology client.  The fund cited insufficient growth of the business and stock underperformance, which it attributed to mismanagement and lack of a clear strategy at the board level.  However, the client had in fact successfully completed turnaround activities and had activated a compelling strategy to drive sustained shareholder value.   

Solution

IMS mobilized to quarterback a strategic and aggressive campaign which included:

• Developing and driving a communications strategy to ensure the incumbent board’s progress and goals were clearly presented and understood by existing shareholders.  Tactics included:

  • Establishing a Company platform statement emphasizing the merits of the current board and its strategy

  • Issuing press releases related to the proxy battle, as well as operational and financial releases to highlight the ongoing growth initiatives

  • Maintaining consistent communication with specific linchpin institutional holders

  • In conjunction with management and the proxy firm, proactively communicating with all smaller institutional and retail holders to secure their vote

  • Creating a presentation for Institutional Shareholder Services (ISS) that clearly illustrated why the dissident board slate was not in the best interest of shareholders; As a result, the client company won ISS endorsement

Result

Shareholders overwhelmingly rejected the dissident slate with a vote of 72% in favor of the existing board.  Client was able to re-engage 100 percent of its focus on executing its strategy to drive sustained shareholder value.