NEW YORK, May 14, 2020 /PRNewswire/ -- Wynnefield
Capital, Inc. (together with its affiliates, "Wynnefield" or
Wynnefield Capital), beneficial owners of approximately 8.5% of the
outstanding common stock of MVC Capital Inc. (NYSE: MVC) ("MVC" or
the "Company") today announced that its good faith attempt to reach
a settlement with MVC is teetering, due to the chicanery of the
Company's long-standing Chairman, Mike
Tokarz.
By way of background:
- Following shareholder pressure, MVC vetted and agreed to
nominate two of Wynnefield's independent nominees for election at
the Annual Meeting of Stockholders ("Annual Meeting").
- In turn, Wynnefield asked that the Annual Meeting be held by
June 24th (the same date
as last year's meeting) and that its nominees be appointed to the
Board on that date if the Annual Meeting was otherwise delayed –
both reasonable requests that MVC denied.
- Puzzled by MVC's response, but willing to go along with their
proposed July 15th meeting
date, Wynnefield strongly requested that no company transactions be
entered into prior to the Annual Meeting, unless first approved by
a majority of the Board's independent directors. Wynnefield
believed this to be a reasonable request, with an eye towards
protecting stockholders against a self-interested, entrenching
transaction that may not require their approval.
- MVC, driven by Chairman Tokarz, rejected Wynnefield's request
and, in turn, offered to replace directors, Emilio Dominianni, William Taylor and Warren Holtsberg at the Annual Meeting with
Wynnefield's nominees. Noticeably absent from this list is MVC
Chairman Mike Tokarz.
- Given Chairman Tokarz's history of value destruction and recent
lack of integrity, including attempted greenmail, Wynnefield and
like-minded stockholders are left deeply concerned that Mr. Tokarz
and select Board members are plotting – either a transaction that
prioritizes the interests of Mike
Tokarz over the interests of MVC stockholders or blocking a
serious expression of interest from a third party.
- Mr. Tokarz and fellow insider Warren
Holtsberg should act in the best interests of the Company
and its stockholders, by recusing themselves from a vote of the
Board involving a merger or other extraordinary transaction prior
to the Annual Meeting.
Nelson Obus, President of
Wynnefield Capital, said:
"We have no idea what has gotten into Mike Tokarz as of late. He had been an
affable, responsive person, but has refused to speak with his
second largest shareholder for nearly five months and most recently
sent a surrogate to offer me greenmail. Since its founding
twenty-seven years ago, Wynnefield Capital has supported the best
interests of outside stockholders and advocated for sound
governance practices. We would never consider taking
greenmail and are deeply insulted by Mike's actions.
"We thought we were close to an amicable settlement with MVC and
made a very practical request. We are taken aback by Mike's
refusal to simply refrain from entering the Company into a
transaction prior to the Annual Meeting, without first receiving
majority approval from the independent directors.
"As responsible investors we must shine a bright light on any
potential motivation to circumvent the will of MVC's stockholders –
whether that be blocking a serious expression of interest from a
third party or by entering into a self-serving, entrenching
transaction not requiring stockholder approval.
Therefore, we are now insisting on the recusal of the two
insider directors, should any merger proposal be put before the
Board prior to the Annual Meeting to be held on July 15.
"Let's be frank here, if Mike didn't have something up his
sleeve, he'd agree to our very reasonable request. We gave
Mike the benefit of the doubt when he insisted on pushing the
Annual Meeting out into mid-July, but 'something is rotten in
Purchase, NY.'
"To the detriment of all stockholders, MVC's long-tenured
directors, particularly Chairman Tokarz, have demonstrated an
inability to effectively guide the Company, resulting in deep
discounts between NAV and share price, poor investment decisions,
decreasing market capitalization and lackluster stockholder returns
as compared to peers.1 Likewise, they have
presided over a company whose corporate governance standards have
deteriorated.
"In the absence of a settlement that protects all stockholders,
we will move ahead on the nomination of three independent director
candidates with the requisite financial and public company
expertise to reposition MVC for success, with an eye towards
returning capital to stockholders. If elected, our candidates
will instill much-needed accountability, energy and fresh
perspective to the Board, exercising their fiduciary duties and
acting in the best interests of all stockholders. It is
certainly time for change, as all the stockholders of MVC deserve a
full Board that is capable of delivering value through sound
business judgment.
"Specifically, we will look to unseat Chairman Mike Tokarz, Emilio
Dominianni and Gerald
Hellerman, among MVC's nine person Board. We will
encourage Warren Holtsberg to remain
on the Board so that he may represent MVC's management
company."
Wynnefield Capital's director nominees are:
Ron Avni (44)
- 20 years of extensive financial, operational and investment
management experience.
- Track record of successfully creating shareholder value within
distressed companies and transforming these companies in
collaboration with key stakeholders.
- Adviser to companies on investment and business
strategies.
- Served as a portfolio manager at QVT Financial LP, a
multi-billion-dollar investment firm where, among other things, he
led investment activities in closed-end fund arbitrage and related
special situations globally.
- Served as senior quantitative analyst and trader at Weiss Asset
Management from 2003 to 2005, where he developed quantitative
trading methodologies and software as well as managed a broad array
of the firm's business operations.
- CFA® Charterholder. Received an AB in Physics, magna cum laude,
from Harvard University and is enrolled
in a PhD program at the University of Texas at
Austin.
John D. Chapman (age
64)
- Specializes in representing shareholder interests in connection
with the operation and management of investment funds and ancillary
assets.
- Unique skillset, insights and qualifications to serve as a
member of MVC's Board and any of its committees.
- Extensive legal, financial analysis and corporate governance
expertise.
- Served as the chairman, executive director, or non-executive
director of a number of public companies, both domestically and
globally.
- CFA® Charterholder and member of the New York State Bar Association. Received a
B.A. from Bates College and a Juris
Doctorate from The University of
Texas.
Arthur D. Lipson (77)
- Served as the managing member of Western Investment LLC,
specializing in investing undervalued companies, particularly
closed-end funds.
- Served as a director of Pioneer Municipal and Equity Income
Trust, during which time he oversaw the elimination of a steep
discount to PBF's net asset value and the merger of PBF into
Pioneer Tax Free Income Fund, an open end fund.
- Previously headed all fixed income research for Lehman Brothers
and Paine Weber, and is credited as the creator of the Kuhn Loeb
Bond Indices, now known as the Bloomberg Barclay Indices.
- Long-term stockholder of MVC Capital.
- Received a B.S. from the California Institution of Technology
and a M.S. from Columbia
University.
Additional biographical information regarding Wynnefield
Capital's director nominees are included in Wynnefield Capital's
amended Statements of Beneficial Ownership on Schedule 13D
previously filed with the SEC.
Kane Kessler, P.C. is providing
legal counsel to Wynnefield Capital.
About Wynnefield Capital, Inc.
Established in 1992, Wynnefield Capital, Inc. is a value
investor specializing in U.S. small cap situations that have
company or industry specific catalysts.
Additional Information and Where to Find It
Wynnefield Partners Small Cap Value, L.P.; Wynnefield Partners
Small Cap Value, L.P. I; Wynnefield Small Cap Value Offshore Fund,
Ltd.; Wynnefield Capital, Inc. Profit Sharing & Money Purchase
Plan; Wynnefield Capital Management, LLC; Wynnefield Capital,
Inc.; Joshua H. Landes; and Nelson
Obus (collectively, "Wynnefield Capital") together
with John D. Chapman, Ron Avni and Arthur D.
Lipson are participants in the solicitation of proxies from
stockholders in connection with the 2020 Annual Meeting of
Stockholders (the "Annual Meeting") of MVC Capital, Inc. (the
"Company"). Wynnefield Capital intends to file a proxy statement
(the "2020 Proxy Statement") with the Securities and Exchange
Commission (the "SEC") in connection with the solicitation of
proxies for the Annual Meeting unless it withdraws its nominations
and/or proposal.
Wynnefield Capital may be deemed to beneficially own 1,514,379
shares of the Company's common stock, representing approximately
8.5% of the Company's outstanding common stock. Other than Mr.
Lipson, who may be deemed to beneficially own 202,123 shares of the
Company's common stock, representing approximately 1.1% of the
Company's outstanding common stock, none of the other participants
own any shares of the Company's common stock. Additional
information regarding such participants, including their direct or
indirect interests, by security holdings or otherwise, will be
included in the 2020 Proxy Statement and other relevant documents
to be filed with the SEC in connection with the Annual Meeting.
Promptly after any filing of its definitive 2020 Proxy Statement
with the SEC, Wynnefield Capital intends to mail the definitive
2020 Proxy Statement and an accompanying proxy card to some or all
stockholders pursuant to applicable SEC rules. STOCKHOLDERS ARE
URGED TO READ THE 2020 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE
COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain,
free of charge, copies of the definitive 2020 Proxy Statement and
any other documents filed by Wynnefield Capital with respect to the
Company with the SEC in connection with the Annual Meeting at the
SEC's website (http://www.sec.gov).
Media Contact:
Daniel Yunger / Mark Semer
Kekst CNC
212.521.4800
daniel.yunger@kekstnc.com / mark.semer@kekstcnc.com
Proxy Solicitor:
Saratoga Proxy Consulting
John Ferguson / Joe Mills
212.257.1311
info@saratogaproxy.com
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1 Since November 2003, MVC's total
shareholder returns, including dividends, have underperformed
the S&P 500 Index by a staggering 154.69% (205.89% over the
past ten years, 29.50% over the past five years, 8.72 over the past
three years and 6.79% over the last year). Performance measured
through close of trading on February 28, 2020.
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SOURCE Wynnefield Capital