New York (HedgeCo.Net) – Minnesota-based entertainment company ValueVision Media has rejected proposals by $1.5 billion activist hedge fund Clinton Group to hold a shareholder meeting in order to elect a new CEO and board of directors.
The Clinton Group then joined forces with another hedge fund, Cannell Capital, and threatened legal action. The two hedge funds together hold more than 10% of ValueVision’s stock.
“Clinton’s demand letter does not satisfy the applicable requirements of ValueVision’s by-laws and Minnesota law.” ValueVision said in a letter, “Among other things, the group Clinton has formed for the purposes of demanding a special meeting does not hold…. valid voting power….(or) a sufficient percentage of ValueVision’s outstanding shares to satisfy the required thresholds for demanding a special meeting.”
The Clinton Group says that the media company should, “Call off the law firms, publicists, proxy solicitors, investor relations professionals and executive recruiters (and all their unavailing and flimsy delay tactics) and do the right thing as a fiduciary: Put in place the strong board we have recruited.”
The NYT reports: “ValueVision Media Inc. has a market capitalization of $259.38 million. It has shown weak growth relative to its peers, with a three-year annualized change of -2.97% in its operating profit margin, compared to the sector average of 7.26%. The company has outperformed the S.&P. 500 over the last 52 weeks, gaining 181.18%. Shares in ValueVision fell 1.1 percent, to close at $5.23 on Friday. ”
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