Investors Business Daily – TechTeam Global Inc. said Monday it would fight a hedge fund’s attempt to replace its board of directors, saying the move isn’t in the long-term interests of shareholders.
Costa Brava Partnership III LP moved last week to nominate seven of its own candidates to replace TechTeam’s board of directors at the IT outsourcing company’s annual meeting, saying the move was a first step in unlocking value for all of the company’s investors.
Costa Brava, which said it owned 8.8% of TechTeam’s shares (TEAM), added that it isn’t trying to oust the company’s current executive team.
Costa Brava is one of a clutch of so-called activist hedge funds that could make this year’s round of annual shareholder meetings difficult for companies they target. Activist hedge funds often take large stakes in companies and try to change strategy by either negotiating with management or replacing directors and other executives with their own candidates.
“Long-term investors are well acquainted with the short-term financial horizons that motivate certain activist investors,” Chairman Kim Cooper, one of those targeted by Costa Brava, said in a statement. “Costa Brava’s recent history of litigation and disruptive tactics appear to be intended to produce quick returns in lieu of the longer term interests of other stockholders.”
Costa Brava also said that it has sued TechTeam to force the company to give it access to books and records. Costa Brava alleged that TechTeam has already refused two of its requests for the documents.
