Ader's bwin.party board changes get independent backing
Proxy advisory firm says activist investor has stated "clear and compelling case" for board-level change
The activist investor attempting to make substantial changes to bwin.party’s executive board said today he is “gratified” after two independent proxy advisory firms backed his directorial nominations.
Jason Ader, who owns 5.25% of bwin.party shares through his SpringOwl investment firm, made four nominations to the operator’s board last month after claiming a management overhaul was required.
Three of the nominated candidates “ including Michael Fertik, Francis Grady and Steven Rittvo “ have today received vigorous backing Glass Lewis & Co, which along with ISS have been hired by as advisors by Ader.
However it is understood that both firms remain in discussions with bwin.party, having not yet completed their entire report.
Nominations will be voted upon during bwin.party’s AGM on 22 May. Bwin.party has recommended its shareholders vote against SpringOwl’s proposals and claimed the investor had not provided any insight into its strategic vision for the operator.
Glass Lewis said in a statement that it believes SpringOwl has submitted a “clear and compelling case for board-level change”, adding that the incumbent directors have “centred on middling rebukes of decidedly nominal concerns”.
“Rather than confront these flagging metrics, the board has pushed for increasingly liberal executive compensation programs that provide for discretionary awards to management while the balance of [bwin.party’s] investors continue to weather unmitigated losses,” it said.
It said it believed SpringOwl has presented a “detailed plan that reflects both industry knowledge and the specific concerns potentially underpinning [bwin.party’s] laggard shareholder returns and faltering operating metrics”.
The firm also criticised the operator’s strategy and execution, which it said may have been due to “internal strife”.
Meanwhile ISS gave specific backing for SpringOwl’s final board candidate Kalendu Patel. It said: “Patel “¦ has always worked in strategy roles, the most relevant one as head of strategy for Best Buy, a large multinational retailer, which may be relevant to the challenges at hand. Based on the factors discussed above, “¦ we conclude that support for nominee Patel is warranted.”
Ader said he was “gratified” with the conclusions of the advisory firms.
“We believe that these four highly qualified independent candidates will significantly contribute to the ability of the reconstituted board to create meaningful value for all BPTY shareholders,” he said.
A spokesman for bwin.party said: “As set out in our recommendations to shareholders on 25th April, the Board’s composition is currently being reviewed by the chairman-elect, Philip Yea. With any potential appointment, the Board’s Nominations Committee needs sufficient information and time to review and interview any candidate in order to determine their suitability and qualifications to serve as a director.
“The Company has yet to be provided with the requested information on any of the four nominees proposed by SpringOwl. We continue to recommend that shareholders vote against SpringOwl’s proposed four nominees to the Board and once again encourage Jason Ader to take up his acquired right to put forward himself or one nominee to sit on the Board.”