Alden 'Disappointed' in Pier 1 Imports' (PIR) Adoption of 10% Poison Pill
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Alden Global Capital LLC , the largest active shareholder of Pier 1 Imports, Inc. (NYSE: PIR), with ownership of approximately 9.5% of Pier 1's outstanding shares, issued a statement today in response to Pier 1's post-market announcement on September 27, 2016 that it has adopted a "poison pill" rights plan (the "Poison Pill") with a 10% ownership limitation. Alden is severely disappointed that Pier 1 has resorted to this highly questionable form of entrenchment rather than engage constructively with one of its largest shareholders.
Heath Freeman, President of Alden, stated, "We were incredibly surprised and disappointed to learn that Pier 1's Board of Directors has taken the unusually aggressive step of adopting this unduly restrictive Poison Pill less than 10 days following our 13D filing and just four days after our in-person meeting with Chairman Terry London. We have expressed to Mr. London that our strong preference is to work collaboratively with the Board regarding our desire to be involved in the ongoing CEO search process, as well as our belief that shareholder representation is required on the Board at this critical juncture. At no point during our discussions have we mentioned anything even close to an intention or interest in acquiring Pier 1. It is therefore entirely disingenuous for Mr. London to assert that the Poison Pill is required to 'guard against coercive or unfair tactics to gain control of the Company without paying all shareholders an appropriate premium.' This is a nonsensical scare tactic being used by the Board to make us appear to be a threat."
Mr. Freeman continued, "Clearly, the primary purpose of this Poison Pill is to protect the troubling status quo and entrench the current Board all while wasting even more shareholder capital. How does a substantial shareholder whose only objective is to ensure that the proper steps are taken to enhance shareholder value pose any type of a risk to the Company or its shareholders? If anyone poses a threat to long-term value creation at Pier 1, it is the current Board who has overseen disastrous operational performance and substantial value destruction. In fact, since Mr. London was appointed Chairman of the Board in June 2012, Pier 1's stock price has gone from around $16.00 to around $4.00, representing a massive decline of approximately 75%."
Mr. Freeman concluded, "It is ironic, indeed, that the current Board has taken steps to limit our ownership when the entire Board, apart from the soon-exiting CEO, collectively own only about 0.6% of the Company and has very little of their own 'skin in the game.' Our interests are directly aligned with all shareholders. Unfortunately, Pier 1 has chosen to adopt a Poison Pill rather than work constructively with its largest active shareholder. Putting aside our deep frustration with this uncalled for response to our involvement, we remain open to discussing ways in which we can work constructively with the Board to ensure the proper steps are taken to put the Company on the right path towards shareholder value creation."
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Related Entities13D, Alden Global Capital
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