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 Activist investor Sun Capital Securities Group LLC, which is pushing for changes at Furniture Brands International Inc., is reaping the reward of its support from proxy advisory services firm Institutional Shareholder Services Inc. Next stop, sale?
The insurgent investor reported Thursday successfully winning three seats on the board of Furniture Brands. According to a proxy solicitor, Sun Capital won its three seats for Alan Schwartz, Ira Kaplan and T. Scott King by "a substantial margin." The successful proxy contest comes after ISS last month recommended to it institutional investor clients that they should support the three-person dissident slate. With directors on board, the activists may also be one step closer to buying the business. In addition to its proxy contest, the activist fund had made an unsolicited bid for the furniture maker on Feb. 21. Furniture Brands shunned Sun Capital's advances, saying that the strategic plan it launched in the fall of 2007 is "on track, and earnings momentum is developing." A key part of that plan is to switch to an operating company model designed to generate $40 million to $50 million in annual cost savings. The St. Louis, Mo.-based furniture-making company also argued that Sun Capital directors would have a conflict of interest because they would be "less likely to fight for value" once another bid was put on the table. Only time will tell whether their fears are realized. Nevertheless, Sun Capital's vice president, Jason Bernzweig, was, unsurprisingly, excited by the result:
- Ron Orol See Dealscape: ISS supports Sun Capital's Furniture Brands proxySee Dealscape: Furniture Brands shoots down Sun Capital offer See Dealscape: Samson wrestles with Furniture Brands Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. Categories Deal Video
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