Charming Shoppes Inc. has ended a long and exhaustive proxy fight with activist investors Crescendo Partners II LP and Myca Partners. In an 11th-hour agreement with the 8% stakeholders on Thursday, the day Charming Shoppes was scheduled to hold its annual shareholders meeting, the plus-size clothing retailer agreed to nominate to its board two of the activists' three nominees including turnaround specialist Michael Appel and Crescendo director Arnaud Ajdler.
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As part of the deal, the company will also nominate two of its three prior nominees -- chairman, president and CEO Dorrit J. Bern and Alan Rosskamm, former chairman and CEO of Jo-Ann Stores Inc. -- as well as two new outside nominees Richard Bennet, former vice chair of the May Department Stores Co., and Michael Goldstein, former chairman and CEO of Toys 'R Us Inc.
With the addition of the four new nominees, Charming Shoppes' board will be expanded from eight to 11. The board is no longer nominating previously announced Jeannine Strandjord, Sprint's former senior vice president and chief integration officer. The third member of the dissident slate, Myca official Robert Frankfurt, will not join the board.
In another shareholder-friendly move, Charming Shoppes will present a proposal to eliminate its staggered board structure at the rescheduled 2008 annual meeting set for June 26, 2008.
Crescendo and Myca had previously launched a proxy contest to install three director candidates on the board, but proxy advisor Glass, Lewis & Co. LLC in late April recommended only one of the dissident duo's slate, Appel. The proxy adviser did not recommend votes for Ajdler and Frankfurt.
In what could be viewed as a response to the dissident shareholders, Charming Shoppes in late April hired Banc of America Securities LLC and Lehman Brothers Inc. to explore a broad range of operating and strategic alternatives for the noncore catalogs.
Charming Shoppes' fight with activists have been a long and arduous one, having filed a lawsuit against the dissident group in early March, alleging it provided misleading information in a filing with the Securities and Exchange Commission. - Michael Rudnick
See story from the Philadelphia Inquirer
See Dealwatch: Activist investors' retail campaigns
