Toro 18 Holdings withdrew its nomination at Turtle Beach (HEAR); Turtle Beach appoints William Wyatt, the Founder and CIO of The Donerail Group to the board

Market Cap: $182 million| Turtle Beach Corporation operates as an audio technology company. 

 (i) Toro 18 Holdings

On March 23, 2023, Toro 18 Holdings (7%) stated that it intended to engage in communications with the board and management team regarding opportunities to enhance stockholder value. Source

On April 3, 2023, Toro 18 Group filed proxy materials, announcing its intent to nominate a slate of director candidates for election to the board at the upcoming 2023 AGM. Source

On April 7, 2023, Toro 18 Group (7.4%) delivered notice to the company in accordance with the notice requirements of the Federal “Universal Proxy Rules”, as to the names of Toro 18’s nominees for election to the Board at the 2023 annual meeting prior to the deadline of April 8, 2023. The nominees are Eric Singer, William C. Martin and Sean Madnani. Source

On April 13, 2023, Toro 18 Group (8.4%) delivered a letter to the company nominating a slate of three candidates for election to the board at the 2023 AGM. Toro 18 Group stated that it tried to engage with the company on a proposed settlement to avoid a full proxy fight at the annual meeting. Despite the company announced that Toro 18 Group could not accept the company’s settlement proposal for several reasons, including that the Board would not disclose which second director, besides Mr. William Keitel, would resign from the Board or guarantee that a strategic review committee would be formed. Notably, even if a committee were to be formed, the Board was insistent that the committee would consist of 5 directors – a size Toro 18 Group believes would create inefficiencies and effectively give control of such process to incumbent directors. Source

On May 1, 2023, the company announced that Juergen Stark, its CEO, would be stepping down, effective June 30, 2023, and both Mr. Stark and William E. Keitel, would not be standing for election at the 2023 AGM. While Toro 18 Group is pleased with the company’s announcement that Mr. Stark will be stepping down as CEO, an outcome Toro 18 Group believes is the result of its active engagement, Toro 18 Group remains concerned that the company has not announced plans to explore strategic alternatives or put out meaningful plans to address the company’s performance issues. Source

On May 8, 2023, Toro 18 Group stated that it is pleased that the Board has followed their recommendation and announced the formation of a special committee tasked to explore strategic opportunities. Based on this decision, as well as the announcement last week that the CEO would be transitioning and another longer tenured director would be stepping off the board by the 2023 annual meeting, Toro 18 Group has determined to withdraw the Nomination Letter and their nomination of three nominees for election at the 2023 annual meeting. Source

(ii) The Donerail Group

 On August 9, 2021, The Donerail Group (6.4%) stated that it has been engaged with the Board and management for the past five months regarding a number of value-creating and governance-enhancing topics. In an letter to the company dated July 19, 2021, Donerail made an offer on April 27, 2021 to acquire the company at $34.50 per share.

On August 19, 2021, Donerail issued a press release announcing that the company had rejected Donerail's updated of $36.50 per share. Since submitting its increased $36.50 per Share offer, the Board has indicated to Donerail that $36.50 per share is inadequate and that the Board would only be open to re-engaging if Donerail provides a proposal at a meaningfully higher price, thereby effectively rejecting Donerail's $36.50 all-cash offer that would provide certain, immediate and meaningful value to the shareholders. Donerail further highlighted its concerns that the company's reactions to Donerail's proposals demonstrate the entrenchment of the Board and its unwillingness to genuinely consider opportunities to maximize value for all the shareholders.

On December 22, 2021, Donerail (7.4%) issued a press release announcing that it had submitted the Revised Offer to acquire the company at $32.86 per share.

On March 3, 2022, Donerail Group withdrew its acquisition offer and issued a letter to shareholders stating that it intends to nominate  a full slate of director candidates for election to the Board at the 2022 AGM. It expressed its disappointment with the company's fourth quarter 2021 results and 2022 annual guidance. Source

On March 22, 2022, Donerail Group nominates full slate of six candidates for election to the Board at the 2022 AGM. Further, Donerail Group announced that SCW Capital Management and Harbert Fund Advisors have joined with them to effect change at the company. Together they hold 8.5%. It has launched www.ResetTurtleBeach.com for Updates on its campaign for change. Source

On April 6, 2022, Donerail Group (8.5%) issued a letter to the shareholders soliciting vote for its nominees.

On April 22, 2022, Donerail Group (8.5%) filed proxy materials seeking support for its nominees

On May 13, 2022, the company announced it has reached an agreement with The Donerail Group on a meaningful refreshment of the Board. In addition, the Company disclosed its formation of a Strategic Review Committee that is overseeing an expanded and wide-ranging process to identify a buyer for the business. In connection with the Cooperation Agreement, Turtle Beach is appointing three members of the Donerail slate to the Board. In addition, one current Turtle Beach director will retire from the Board. 

On May 20, 2022, Donerail Group reduced its stake to 7.3%

On May 8, 2023, the Board increased the size of the Board from nine (9) to ten (10) members and appointed William Wyatt, Donerail Group, to the Board. In connection with his appointment, Mr. Wyatt was also appointed to the newly formed Value Enhancement Committee of the Board.