Furniture Brands (FBN) Receives Letter From SCSF Equities, LLC
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Furniture Brands International (NYSE: FBN) acknowledged receipt of a letter from SCSF Equities, LLC demanding stockholder information for the purpose of potentially pursuing a proxy contest with respect to the election of the board of directors of Furniture Brands. The letter was filed with the Securities and Exchange Commission on Friday, March 28. Sun Capital holds approximately 9.5% of all outstanding shares.
"We are disappointed Sun Capital is considering pursuit of a costly and disruptive proxy contest. A proxy contest can only serve as a distraction to the company when attention and resources would be better used in creating value for stockholders by implementing our strategic plan. We assure all of our stockholders that we remain committed, as always, to doing what is right for our stockholders, our employees, and our customers,'' said W.G. (Mickey) Holliman, Chairman of the Furniture Brands board of directors
In considering Sun Capital's interest in the company, the Furniture Brands board of directors has raised the following concerns:
Sun Capital has significant positions in several furniture manufacturers and retailers that compete directly with Furniture Brands, including Berkline/Benchcraft, Lexington, Powell, Wickes, Rowe, Nationwide Warehouse, and Design Within Reach. Granting Sun Capital access to proprietary and confidential information concerning Furniture Brand's strategy and operations could impair the Company's competitive position.
In light of their stated interest in acquiring Furniture Brands, allowing Sun Capital to opportunistically influence the strategic direction of the company from a board position may not be in the best interest of all stockholders.
Sun Capital has a mixed record of performance in the home furnishings industry. A number of Sun Capital's furniture industry portfolio investments are currently in bankruptcy, and one of those entities is a debtor to Furniture Brands of more than $2 million.[SM]
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