Raider Wants SEC to Investigate Broadridge Over Share Count
August 23, 2010
Wyser-Pratte Management, a New York-based fund manager and corporate raider, claims Broadridge Financial Solutions and French media giant Lagardere Group may have lost shares voted in favor of its proposals during an April proxy contest.
Guy Wyser-Pratte, president of the firm bearing his name, wants the Securities and Exchange Commission to investigate whether U.S. broker-dealers and custodians or their agents for the Lagardere general meeting transmitted their votes accurately.
He had been seeking a place on Lagardere's board and a change in Lagardere by-laws that would make it easier to block other shareholder proposals.
Wyser-Pratte also wants the SEC and Autorite des Marches Financiers (AMF) in Paris, the French securities watchdog, to investigate the nature of an alleged “improper” relationship between Broadridge Financial and Lagardere and whether Lagardere accurately counted the votes it received, he contended in a July letter to the SEC.
Kevin Callahan, a spokesman for the SEC, declined to comment about the status of Wyser-Pratte's request on the grounds the regulator "can neither confirm nor deny any investigation into the company."
Broadridge said there was "no basis" for Wyser-Pratte's comments and that Broadridge had "no dog in the fight'' between Wyser-Pratte and Lagardere.
New York-based Broadridge Financial is the world’s largest proxy distribution and voting firm. The firm is typically hired by U.S. banks and brokerages to send out proxy materials and collect votes for meetings in the United States and overseas.
Wyser-Pratte is known for reaping big profits by taking minority stakes in poorly managed overseas companies and forcing management to either raise dividends, buy back shares at a profit to the firm or to break up the company and sell off the pieces.
Last year TUI AG, owner of Europe's biggest tour operator, decided to sell off part of its Hapag-Lloyd shipping unit after Wyser-Pratte and other shareholders demanded the move. In 2009, Horst Kayser, chief executive officer, and Matthias Rapp, chief financial officer, at German robot-maker Kuka AG stepped down after pressure from Wyser-Pratte and other shareholders to change their corporate strategy.
Having received only 22 percent of votes in favor of his board candidacy, Guy Wyser-Pratte failed to win a seat on Lagardere’s board. He also lost a vote to change the company’s corporate structure as a “societe en commandite par actions” – a type of French stock partnership that gives CEO Arnaud Lagardere the power to block some shareholder proposals.
Wyser-Pratte owns a 0.53 percent stake in Lagardere and needed to win a majority of the shares voted to gain a seat on Lagardere’s board. He also needed to win two-thirds of the total number of shares voted in order to get Lagardere to change its corporate structure; in that case, his proposal won about 23 percent.
Guy Wyser-Pratte’s request for an investigation into Broadridge’s role in Lagardere’s annual meeting was made in a July 14th letter to the SEC. That request followed one to the AMF in June. The letter to the SEC was one of several dozen written by respondents to the SEC’s request for comment starting that day to proposed changes to the proxy distribution and voting system.
