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AVI claims moral victory in Third Point tussle

AVI claims moral victory in Third Point tussle – AVI (manager of AVI Global Trust) and three other shareholders in Third Point Investors (including Metage Capital and Global Value Fund) who together represent over 18% of Third Point’s shares requisitioned an EGM to remove Joshua L. Targoff from Third Point’s board. AVI says that the resolution was put forward as a proxy for the vote on a proposed discount control mechanism that was denied to shareholders by the board.

The vote was lost. However, 52% of public shareholders voted for the proposition – in a normal company, the requisitionists would have won. Third Point isn’t a normal company though.

AVI says “We understand that Daniel Loeb, CEO of Third Point LLC, voted his 17% stake against this resolution, meaning that an overwhelming majority (75%) of independent shareholders supported the discount control mechanism.

Given the total number of votes cast on Resolution 2 exceed the number of public shares outstanding, it is clear that VoteCo, an entity set up solely to resolve jurisdictional regulatory issues in the US, voted its Class B Shares against the resolution. With VoteCo’s votes removed from the count, it is clear our resolution was carried by a majority of all shareholders and had the emphatic backing of independent shareholders.

Our intention, when requisitioning this vote, was to finally give shareholders an opportunity to vote on a structural solution to the discount – something the board has repeatedly resisted. Independent shareholders have spoken in no uncertain terms and will now expect the board to listen. It is in no-one’s interest that this dispute plays out any longer in public, and we very much hope that the board will now be willing to enter into discussions with us privately to find a solution and allow the company to move forward on a stronger footing with a unified shareholder base.”

[The VoteCo issue came up before in this debate. It is an odd construct and not one that was supposed to block legitimate shareholder requests. An activist fund like Third Point should not be able to hide behind such a structure. It delegitimises its own calls for corporate governance improvements at the companies Third Point invests in.]

AGT : AVI claims moral victory in Third Point tussle

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