Last week in an unlikely defeat, activist hedge fund Millbrook Capital (MMI) withdrew its nominees for the board of Chemed Corporation (CHE). MMI had been pushing the company to split-up its disparate businesses into two separate companies. In a letter last month, MMI had also expressed disapproval with management’s “corporate largesse.”
MMI made its decision to withdraw its slate of board nominees after Chemed’s nominees received the support of proxy advising firms Glass Lewis and RiskMetrics Group.
On the bright side for MMI, in response to the hedge fund’s initial complaints, Chemed reshuffled its original board nominees by replacing two “insider directors” with two independent nominees. In MMI’s May 20th letter, the activist hedge fund manager welcomed Chemed’s “two qualified and independent directors” and stated that “We know both Ernie Mrozek and Tom Rice and consider them to be accomplished executives with reputations for high integrity and competency. We are pleased that our actions resulted in Ernie and Tom being nominated for election to the board.”
In the letter, MMI also announced its intention to remain a major shareholder of the company and said that it hopes to “Continue to engage in constructive dialogue in the future regarding our mutual objective of seeing future value creation and maximization at Chemed.” |
