13D weekly report - Dec 02, 2024 to Dec 06, 2024

Global Value Investment Corp desires for Board representation on Fluent Inc (FLNT)

Key Summary: On December 3, 2024, Global Value Investment Corp (15%) expressed an interest to the company in obtaining board representation

Market Cap: $45 million | Fluent, Inc. provides data-driven digital marketing services in the

United States and internationally.

On December 3, 2024, Global Value Investment Corp (15%) expressed an interest to the

company in obtaining board representation. Source

JCP Investment Management entered into a Cooperation Agreement with Red Robin Gourmet Burgers, Inc (RRGB)

Key Summary: On December 3, 2024, JCP Investment Management (10.7%) entered a Cooperation Agreement with the company, appointing James C. Pappas and Christopher Martin as directors and expanding the board to 10 members. Previously, VIEX Capital, Clinton Group,Oak Street, and Vintage Capital engaged in activism, influencing board composition, governance changes, and strategic reviews, including Vintage's proposed $40 per share acquisition and a settlement to add a nominee in 2020.

Market Cap: $103 million | Red Robin Gourmet Burgers, Inc., together with its subsidiaries,

primarily develops, operates and franchises casual-dining restaurants and fast-casual

restaurants in North America and focuses on serving a selection of gourmet burgers.

On December 3, 2024, JCP Investment Management (10.7%) and the company entered into a Cooperation Agreement under which the company agreed to appoint James C. Pappas and Christopher Martin as directors, expanding the board to 10 members.

Past

VIEX Capital Advisors

In late 2019 and early 2020, VIEX Capital actively engaged with the company, initially disclosing a 6.7% stake on December 30, 2019, and criticizing the lack of a strategic plan following the rejection of Vintage Capital's proposal, as well as the adoption of a poison pill and retention of expensive defense counsel. VIEX increased its stake to 8.2% on January 14, 2020, but later reduced it to 4.9% by March 13, 2020.

Clinton Group

Between 2010 and 2011, the Clinton Group and Spotlight Advisors engaged actively with the

company, leading to significant governance changes. In March 2010, three new directors were added to the board under a settlement agreement. By June 2010, discussions with directors focused on stock upside, buyout responsibilities, and accelerating agreed initiatives. In January 2011, the Clinton Group urged the board to solicit acquisition proposals, eliminate the poison pill, and avoid adopting another without shareholder approval. Following these concerns, the company amended its poison pill terms, proposed measures for board declassification, and emphasized its willingness to consider M&A proposals, actions that the Clinton Group welcomed.

Oak Street

In March 2011, Oak Street nominated two board candidates. By April 5, 2011 the company

reached a settlement agreement with Oak Street, agreeing to expand the board by one seat and appoint one of Oak Street’s nominees.

Vintage Capital

In 2019, Vintage Capital (11.5%) pressed the company to explore strategic alternatives,

including an auction, and threatened to call a shareholder meeting to replace directors if the

board failed to act. It later proposed a $40 per share acquisition and criticized the board’s

rejection of its bid and new CEO compensation. Vintage nominated four directors for the 2020 election. In March 2020, a cooperation agreement was reached, expanding the board to 11 members and adding Vintage’s nominee, Anthony S. Ackil. By June 2020, Vintage reduced its stake to 4.95%.

Vista Outdoor (VSTO) Announces Completion of CSG Transaction

Key Summary: On November 22, 2023, Colt CZ proposed a strategic combination with Vista Outdoor valuing the company at $30.00 per share and including a $900 million share repurchase post-transaction. On July 17, 2024, Gates Capital Management, owning 9.6% of Vista, opposed the sale of its Sporting Products business to Czechoslovak Group for $2.1 billion, arguing it undervalued the asset and supported alternatives, including negotiating with MNC Capital's $42 per share bid or a tax-free spin-off plan. On September 10, 2024, Gates Capital Management announced ongoing discussions with the company and MNC Capital Partners regarding the revised all-cash MNC Offer and other potential proposals, including rollover transactions related to any merger or business combination. At the special meeting held on November 25, 2024, stockholders voted to approve the sale of The Kinetic Group to Czechoslovak Group

Market Cap: $2.2 billion | Vista Outdoor Inc. designs, manufactures, and markets outdoor recreation and shooting sports products. in the United States and internationally. 

• On November 22, 2023, Colt CZ (5.7%) sent a letter to the Board proposing a strategic combination between Colt CZ and the company that would value the company at $30.00 per share and include a $900 million share repurchase to be executed following closing of the proposed transaction.
• On July 17, 2024, Gates Capital Management, owning 9.6% of Vista Outdoor, sent a letter to Vista's Board opposing the sale of its Sporting Products business, The Kinetic Group, to Czechoslovak Group for $2.1 billion. Gates argued the sale price undervalued the asset, which generated over $400 million in annual free cash flow, and criticized the early retirement of $500 million in low-interest debt, transferring value from shareholders to bondholders. Gates also supported Institutional Shareholder Services' recommendation to vote against the sale and proposed alternatives, including negotiating with MNC Capital's $42 per share bid for Vista or reverting to a tax-free spin-off plan for The Kinetic Group and Revelyst.
• On July 26, 2024, Gates Capital Management, Inc. announced its support for MNC Capital Partners, L.P.'s $42 per share all-cash offer for Vista Outdoor, Inc. Gates Capital deemed MNC's proposal superior to Czechoslovak Group's offer for The Kinetic Group, citing concerns over Vista's recent financial performance and strategic direction. The firm also criticized Vista's management for maintaining an outdated shareholder record date and suggested that shareholders voice their support for the MNC offer directly to Vista's Board of Directors. Source
• On September 10, 2024, Gates Capital Management announced that following the company's review of strategic alternatives and engagement with MNC Capital Partners regarding its revised all-cash offer (MNC Offer), Gates Capital have been and may continue to be involved in discussions with the company and other parties, including MNC. These discussions focus on evaluating the MNC Offer and other potential proposals, including rollover transactions related to any merger or business combination involving the company.
• On September 24, 2024, Gates Capital issued a press release opposing the current CSG proposal to sell The Kinetic Group and urges Vista Outdoor to pursue an all-cash sale of the entire company. Gates Capital supports ISS's recommendation to vote against the CSG proposal and emphasizes the potential benefits of a comprehensive all-cash transaction for Vista shareholders.
• At the special meeting held on November 25, 2024, stockholders voted to approve the sale of The Kinetic Group to Czechoslovak Group a.s. (“CSG”) (the “CSG Transaction”) Source

Converium Capital and Erez Asset Management reaches agreement with Franklin Street Properties Corp (FSP)

Key Summary: On November 5, 2024, Converium Capital and Erez Asset Management announced discussions with the Board on governance, board composition, capital allocation, and asset dispositions, recommending Bruce J. Schanzer for Board appointment. On November 27, 2024, Mr. Schanzer joined the Board and the Audit Committee. The company also entered a Cooperation Agreement with Converium Capital and Erez Asset Management, under which they will vote in favor of all director nominees at the 2025 Annual Meeting. 

Market Cap: $201 million | Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets.

• On November 5, 2024, Converium Capital and Erez Asset Management stated that they have engaged and plan to continue discussions with the Board and management about corporate governance, board composition, operations, capital allocation, and strategic plans, including asset dispositions. They have recommended appointing Mr. Schanzer, Chairman and Chief Investment Officer of Erez Asset Management, to the Board. Additionally, they intend to address various topics such as management, capital and corporate structure, and dividend or buyback policies, while potentially communicating with other shareholders and third parties on these matters. Source
• On November 27, 2024, the company announced that Bruce J. Schanzer will join the Board effective November 27, 2024. In addition, effective November 27, 2024, the Board will appoint Mr. Schanzer to serve as a member of the Audit Committee. In connection with these changes to the Board, the Company has entered into a Cooperation Agreement with Converium Capital and Erez Asset Management, pursuant to which Converium Capital and Erez Asset Management will vote their shares in favor of all of the Board’s director nominees at the 2025 Annual Meeting of Stockholders.

Mantle Ridge LP Adjusts Board Nominations for Upcoming AGM  at Air Products and Chemicals, Inc (APD)

Key Summary: On November 19, 2024, Mantle Ridge filed proxy materials nominating nine nominees for election to the Board at the 2025 AGM. On December 4, 2024, Mantle Ridge LP withdrew its nomination of David Khani, N. Thomas Linebarger, Nichelle-Maynard-Elliott, Donald Wallette, Jr., and J. Steven Whisler, and will only nominate four candidates for election at the Company’s 2025 AGM on January 23, 2025. In September 2013, the company entered an agreement with Pershing Square (holding 9.8%) involving governance changes, including adding three new directors (one representing Pershing Square) to an expanded 14-member board and initiating a CEO search.

Market Cap: $72 billion| Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. 

Mantle Ridge

• On November 19, 2024, Mantle Ridge filed proxy materials nominating nine nominees for election to the Board at the 2025 AGM. Source
• On December 4, 2024, the Company received notice from Mantle Ridge LP that it was withdrawing its nomination and proposal for each of David Khani, N. Thomas Linebarger, Nichelle-Maynard-Elliott, Donald Wallette, Jr. and J. Steven Whisler, and, accordingly, only nominating its remaining four candidates for election to the Board at the Company’s upcoming 2025 AGM, to be held on January 23, 2025

Pershing Square

In September 2013, the company entered an agreement with Pershing Square (holding 9.8%) involving governance changes, including adding three new directors (one representing Pershing Square) to an expanded 14-member board and initiating a CEO search. In January 2014, stockholders approved board declassification, and by June 2014, Seifi Ghasemi was elected as Chairman, President, and CEO, with the stockholder rights plan expiring in July. On September 13, 2016, Pershing Square reduced its stake to 7.8%.

Stadium Capital Management nominated Board candidates to  Sleep Number Corporation (SNBR)

Key Summary: Stadium Capital Management, holding 8.5% as of August 2023, expressed concerns over the company's long-term underperformance and the need for shareholder representation on the Board to improve governance and operations. By September, the firm criticized the Board for poor shareholder returns, capital allocation, and management oversight, requesting a meeting to discuss changes. Following a cooperating agreement in November 2023, the company added two new directors to its Board. Despite recent changes, Stadium Capital, now holding 11%, remains concerned about performance and plans to engage further on the need for additional reforms. On December 2, 2024, Stadium Capital Management nominated four candidates for election to the Board at the 2025 Annual Meeting.

Market Cap: $332 million| Sleep Number Corporation, together with its subsidiaries, offers sleep solutions and services in the United States.

• On August 25, 2023, Stadium Capital Management (8.5%) stated that it is concerned with the company’s long-term underperformance and believe shareholder representation on the Board is needed to drive improvements to the governance, capital allocation and operations. Stadium Capital stated that it is  engaging in discussions with the Board and management regarding the composition of the Board and opportunities to enhance shareholder value. Source
• On September 13, 2023, Stadium Capital Management (9%) issued a letter and press release to the Board requesting a meeting with the independent directors to discuss the urgent need for shareholder-driven Board change. In the letter, Stadium Capital asserted that the Board has presided over abysmal shareholder returns, egregious capital allocation, poor corporate governance practices and questionable compensation decisions. Stadium Capital also expressed its views that the Board’s ineffective oversight has enabled management to let costs run out-of-control in pursuit of its wellness technology strategy. It has also expressed disappointment with the Board’s rejection of a good faith offer to collaborate on director refreshment, including adding its representative to the board.

Valuation insight

"Sleep Number spends 2x on R&D relative to Tempur Sealy even though Tempur Sealy generates, by our estimates, roughly 4x the retail sales of Sleep Number. Yet, based on our research, if Sleep Number spent proportionally the same amount on R&D as Tempur Sealy does, Sleep Number’s 2023 expected EPS would double."

• 
  On November 7, 2023, Stadium Capital Management entered into a cooperating agreement with the company and pursuant to it, the company agreed to add Stephen Macadam and Hilary Schneider (the “New Directors”) to its Board. Source
• On October 30, 2024, the company announced Board and corporate governance changes.
• On November 4, 2024, Stadium Capital Management (11%) expressed concerns about the company's long-term performance despite recent leadership and governance changes. The firm intends to engage with the company and other stakeholders to evaluate the need for further changes. Source
• On November 25, 2024, Stadium Capital Management issued a press release and open letter to the  shareholders. In the November 25th Letter, Stadium Capital expressed their views regarding the company’s need for a reconstituted Board and independent CEO search process. Stadium Capital also called on the company to collaborate with them to add new directors to the Board, appoint an Executive Chairman and ensure a wholly independent CEO search process to identify the company’s next leader. Stadium Capital concluded the Letter by making clear that they intend to nominate several exceptionally qualified directors for election at the 2025 AGM if the Board remains unwilling to engage constructively with them on changes they believe are necessary to unlock value at the company.
• On December 2, 2024, Stadium Capital Management nominated Kevin Baker, Patrick A. Hopf, Jeffrey T. Jackson, and Jessica M. Prager for election to the Board at the 2025 Annual Meeting. Stadium Capital also issued a press release supporting the Nominees, emphasizing their experience in capital allocation, product innovation, and turnarounds. Stadium Capital urged the company to collaborate on Board refreshment and an independent CEO search, but stated it would leave the decision to shareholders if the Board does not cooperate. Source

ISS Recommends to Vote on the Kellner Group’s GOLD Card for Ted Kellner and Paul Sweeney at AIM ImmunoTech Inc (AIM)

Key Summary: On August 14, 2024, Mr. Kellner announced plans to nominate himself, Mr. Deutsch, and Mr. Chioini for the 2024 board elections. On September 3, he formally submitted this notice and indicated an additional nominee would be added. On September 11, he updated the notice to include Mr. Sweeney as a nominee. On December 6, 2024, Mr. Kellner announced ISS supports the Kellner Group and urges stockholders to vote for their nominees and against CEO Thomas Equels.

Market Cap: $16 million | AIM ImmunoTech Inc., an immuno-pharma company, focuses on the research and development of therapeutics to treat multiple types of cancers, viral diseases, and immune-deficiency disorders in the United States. 

• On August 7, 2023, Ted D. Kellner (who, together with Todd Deutsch, owns 6.5%) stated that he had delivered a notice to the Company regarding his intent to nominate himself, Mr. Chioini, and Mr. Deutsch for election to the board at the 2023 AGM. Source
• On August 23, 2023, the Company rejected Mr. Kellner's Notice. On August 25, Mr. Kellner sued in the Delaware Court of Chancery seeking declarations that the bylaw amendments are unlawful and accuses directors of breaching fiduciary duties. He requested a quick trial before the 2023 Annual Meeting. Source
• On October 13, 2023, Ted D. Kellner filed proxy materials seeking support for his nominees. Source
• On November 1, 2023, Ted D. Kellner filed proxy materials seeking support for his nominees.
• On December 28, 2023, the Delaware Court of Chancery invalidated four advance notice bylaw provisions that had been adopted by the Board in March 2023, favoring Mr. Kellner. However, the Court found that Mr. Kellner's notice of nominations did not comply with some of the Company's remaining advance notice provisions. Mr. Kellner disagreed with the Court's opinion on this matter and pursued an expedited appeal while seeking to halt the Company's Annual Meeting during the appeal. AIM had announced that it would disregard Kellner Group's nominations, but stockholders still had the option to "withhold" votes for incumbent directors. Mr. Kellner had intended to pursue his appeal and seek relief for a stockholder vote on Kellner Group nominees, even if the Annual Meeting proceeded as scheduled.
• At the AGM held on January 5, 2024, shareholders have elected all four of the Company’s directors.  But two directors received more than 40% withheld votes. Source
• On August 14, 2024, Mr. Kellner stated that he intends to submit a notice to nominate himself, Mr. Deutsch, and Mr. Chioini for election to the Company’s board of directors at the 2024 annual meeting of stockholders well ahead of the September 13, 2024 deadline. Source
• On September 3, 2024, Mr. Kellner submitted to the Company notice of his intent to nominate himself, Mr. Deutsch and Mr. Chioini for election to the board at the 2024 AGM. Mr. Kellner also notified the Company that he would supplement the Notice no later than September 13, 2024 to identify an additional highly qualified and independent nominee. Source
• On September 11, 2024, Mr. Kellner updated his previous notice to the Company, adding Mr. Sweeney as a nominee alongside himself, Mr. Deutsch, and Mr. Chioini for election to the board of directors at the 2024 Annual Meeting of stockholders. Source
• On October 30, 2024, Mr. Kellner filed proxy materials seeking support for his nominees.
• On November 14, 2024, Mr. Kellner filed proxy materials seeking support for his nominees.
• On December 6, 2024, Mr. Kellner stated that ISS supports the Kellner Group, urging stockholders to vote for their nominees and against current Board members, particularly CEO Thomas Equels. Source

Past

In July 2022, Jonathan Jorgl and his nominees, Robert L. Chioini and Michael Rice, collectively known as the AIM Stockholder Full Value Committee, notified AIM ImmunoTech Inc of their intention to nominate Chioini and Rice for the company's board, aiming to replace Directors William Mitchell and Stewart Appelrouth. The committee reiterated its commitment to this cause in August, and later, in September, filed proxy materials seeking support for their nominees. Disagreements arose as AIM considered the nomination notice invalid due to non-compliance with the company's bylaws. Jorgl sued AIM in Delaware's Chancery Court seeking validation of the nomination. In October, AIM's claims against the committee were dismissed, and the committee continued to voice its concerns, especially after discovering alarming statements made by incumbent directors during the ongoing legal proceedings. In November, the Chancery Court denied Jorgl's plea for a preliminary injunction. Although the committee disagreed with this decision, they opted against proceeding with a trial or seeking an appeal. Finally, at the AGM held on November 3, 2022, all three company's director nominees were elected to the Board.