NEW YORK, Nov. 18, 2013 /PRNewswire/ -- Clinton Group,
Inc., which together with its affiliates and members of its group
("Clinton Group"), owns more than 10% of the outstanding stock of
ValueVision Media, Inc. (Nasdaq: VVTV) ("ValueVision" or the
"Company"), today announced that it has sent a letter to the
Chairman of the Board of Directors of ValueVision (the "Board")
disputing the alleged deficiencies in its submissions to the
Company and demanding a Special Meeting of Shareholders on the time
frame provided under Minnesota
law.
Earlier this month, Clinton Group filed a notice with the
Company calling for a Special Meeting of shareholders at which
shareholders would have the chance to consider Clinton Group's
proposals to remove a majority of the ValueVision directors; expand
the Board of Directors to nine members and elect seven independent
director nominees that Clinton Group believes can assist
ValueVision develop and implement a new growth strategy and select
an executive team capable of executing that strategy.
Clinton Group noted that ValueVision contacted the Clinton Group
and attempted to get a voluntary delay of the Special Meeting two
weeks ago. When Clinton Group rejected the Company's request
for such a delay, ValueVision (with the help of seven separate
professional services firms) announced that it had
discovered trivial "deficiencies" – such as a missing digit on
a zip code – in Clinton Group's 150+ page submission. In a press
release last Friday, ValueVision claimed these deficiencies allow
it to ignore binding Minnesota law
and set a Special Meeting whenever the Board desires.
"This is a shocking disregard for shareholder rights," said
Gregory P. Taxin, President of the
Clinton Group. "There is no dispute that we own and can vote more
than 10% of ValueVision's shares, which is what is required under
Minnesota law to call a Special
Meeting of Shareholders. The only deficiency in our voluminous
submissions appears to be a missing digit on a zip
code. Instead of focusing on creating value for all
shareholders, it is clear the Board would prefer to delay this
meeting as long as possible. There is simply no justification under
Minnesota law for ignoring our
demand or the schedule dictated by the binding
law."
In a letter sent to the Chairman of the Board today, the Clinton
Group also noted that ValueVision has now essentially admitted that
its Board is inadequate and that it needs to find additional
directors in an "accelerated" process. The Clinton Group called
upon the Board to install the independent nominees that Clinton
Group has already recruited (including the former CEO of HSN; the
former CFO and President of HSN; the former Senior Vice President
of Marketing for QVC; Sony Music's former CEO, Tommy Mottola;
Charming Shoppes' former CEO; a media investment banker;
and Fremantle N.A.'s CEO) and to "call off the lawyers,
investment bankers, publicists, proxy solicitors, investor
relations professionals and executive recruiters."
A complete copy of the Clinton Group's letter is below:
[Clinton
Group Letterhead]
November
18, 2013
Mr. Randy S. Ronning
Chairman
ValueVision Media Inc.
6740 Shady Oak Road
Eden Prairie, MN 55344
Re:
Your Expensive Attempts to Deny Shareholder Rights and Entrench the
Board
Dear Mr. Ronning:
Clinton Group, Inc., its affiliates and members of its group
(the "Clinton Group") collectively own more than 10% of the stock
of ValueVision Media Inc. (the "Company" or "ValueVision"), making
us the second largest owner of the Company.
As you know, we are seeking the removal of a majority of the
Board of Directors (the "Board") and the election of seven
independent and highly qualified nominees (the "Nominees"). We
believe the business has been mismanaged and that it can be an
extremely profitable and valuable enterprise if only its uncommon
asset were used well by management.
You and your fellow directors are our fiduciaries. We understand
that you believe you are doing a good job, despite the
hundred million dollars in losses incurred, and shrinking
market share, during your tenure as Chairman. We respectfully
disagree with your self-assessment and have a right under
Minnesota law to seek your removal
and replacement with the consent of our fellow shareholders. Given
your latest actions, you seem intent on spending millions of the
Company's dollars – that is, our money – to delay such an action by
shareholders and prolong your tenure in the $312,000 per year Chairmanship.
How shameful.
We are emboldened to know, however, that all the delay tactics
your team – consisting now of two national law firms, an investment
bank, a proxy solicitor, a public relations firm, an investor
relations firm and an executive recruiter – can dream up cannot
prevent the inevitable vote. Eventually, shareholders get to decide
whom they want to serve as their fiduciaries. The harder you fight
holding a timely vote, the lower your chances of surviving that
vote. In our experience, shareholders do not much appreciate
directors that toy with the shareholder franchise in blatant
attempts to hold on to power and their excessive director fees.
But given your seeming desire to remain Chairman as long as
possible, I can only imagine how thrilled you were to receive the
call from your lawyers – after they racked up what must have been
tens or hundreds of thousands of dollars in bills we and our fellow
shareholders will have to pay – informing you they had found some
technical, trifling reasons to deny us, the undisputed owner of
more than 10% of the Company's stock, our right to call a Special
Meeting. Tell me: Was your enthusiasm lessened when you learned
that the putative reason for denying shareholders a right to vote
on your continued tenure as their fiduciary was that we failed to
provide (in one place in our 150+ page submission) the full zip
code for our office because a paralegal accidentally truncated that
number to four digits? (In her letter to us pointing out this
mistake, the Company's General Counsel is so giddy about finding
this typo – "Eureka!" – that she underlines the obscure portion of
Minnesota law that defines an
"address" as something that "include[s] a zip code.")
Admittedly, that is not the only foible in our submission your
expensive professionals claim to have discovered. There is also the
supposedly earth shattering matter of us addressing one of the two
letters to the wrong ValueVision executive. (We didn't.) Or the one
where you claim we put some information in only one of our two
simultaneous submissions and you believe it should be in both
documents. Hogwash.
Perhaps most entertaining is your claim that our real aim in
seeking to replace a majority of the Board and the Chief Executive,
after you have presided over millions in operating losses and
significant under-performance relative to the Company's peers, is
so that we could have the privilege of investing in the Company at
a significant premium to the stock price. Our October 30, 2013 letter could not be clearer on
this point. We said that if the current Board would
approve an investment, we would be willing to make one to
demonstrate our conviction that the changes we were proposing would
enhance the value of the stock. We specifically conditioned our
offer on the approval of the current Board and made the
offer as a way to further convince the Board to voluntarily cede
power. By rejecting our offer, you have not only demonstrated again
the Board's willingness to trade shareholder value (in this case in
the form of a significant premium) for elongating its own tenure,
you have also precluded us from achieving the rapid upgrade in
personnel we sought without the distraction or expense of a proxy
fight. Given your seemingly tireless efforts to extend your tenure,
we are no longer willing to make such an investment and will not
seek or accept any investment directly into the Company in the
future with this Board or any other. (We also note that we are
disabled from making such an investment for at least four years by
Minnesota law now that we own more
than 10% of the stock and so we could not make an investment in the
Company even if we wanted to.) We believe being the Company's
second largest owner demonstrates enough conviction.
Also bogus is your claim that we do not have the power to vote
at least 10% of the stock. We provided you, voluntarily, with
brokerage statements showing our ownership stake. There can be no
reasonable dispute that we have the power to instruct our
custodians how to vote and that they will, in fact, follow our
instructions as they are contractually bound to do. If we say "vote
yes," they will vote yes. In fact, the entire proxy voting system
in the United States operates on
this basis and nothing about Minnesota law affects our contractual power to
vote our shares at the Company's shareholder meetings or any other
shareholder meeting. Our lawyers will be in touch on this technical
point and, if you so demand, we will have it adjudicated by a
court.
That being said, we have heard you loud and clear. First you
asked us to voluntarily delay the Special Meeting. When we rejected
that request, you drummed up flimsy excuses to justify your own
delay of it. It appears you intend, through any means – legitimate,
technical or petty – devised by the Company's professional advisory
firms to deny shareholders their legitimate rights to a timely
meeting. In your press release, you have seemingly agreed to hold a
meeting in the middle of March – six weeks after the statutory
deadline – although your counsel has informed us the Company
refuses to legally commit to such a meeting. It is clear you want a
delay, and you want complete discretion to postpone or move any
meeting, in spite of the strictures of binding Minnesota law.
We suspect we know why. We surmise your many advisors have
convinced you that in a head-to-head proxy fight between the
Company's existing board and the independent nominees we have
recruited, that the incumbents would not fare well. Indeed, you
essentially admit as much in the Company's press release, where you
note that you have hired yet another professional services firm to
assist you in locating new directors. It is too bad you did not
have the foresight to recognize the inadequacy of the Board prior
to now, for shareholders would have been better off and we could
all have avoided this fight. Instead, you have just now turned your
attention to recruiting an appropriate Board; your insistence on a
delay of the Special Meeting appears borne out of a need for time
to recruit, finally, adequate board members, Minnesota law be damned.
While we appreciate all – even belated – efforts to improve the
group of fiduciaries that work on our behalf on the boards of
companies we own, in this instance we have already done the work
for you: We have recruited a world-class group of independent
nominees that are substantially more qualified than the sitting
directors and, I believe, significantly better than the Boards of
any peer company. While I know they are not directors that you have
personally chosen – and therefore perhaps they are suspect in your
mind – they bring decades of successful experience in the home
shopping, online commerce, merchandising, retailing and media and
entertainment fields as senior executives and Board members. And,
they are ready to begin working tomorrow on behalf of all
shareholders.
Randy, we do not need to wait until March and the shareholders
do not need to incur significant executive search fees. Let's face
it: You've admitted your current Board needs to be augmented and
that it would likely lose to the independent nominees we have
selected. For the good of all shareholders, let's just agree to get
our nominees working now. Call off the lawyers, investment bankers,
publicists, proxy solicitors, investor relations professionals and
executive recruiters (and all their unavailing and flimsy delay
tactics) and do the right thing as a fiduciary: Put in place the
strong Board we have recruited. It, in turn, can quickly replace
the under-performing management team. At a minimum, you should hold
the Special Meeting we have called in the timeframe required under
Minnesota law.
I suspect, given what we have seen so far, that you will reject
these sensible approaches in favor of further combat. All
shareholders will be worse off for that. Perhaps that does not
bother you as much as the thought of losing your lucrative
Chairmanship.
Sincerely,
//s//
Gregory P. Taxin
President
cc:
Board of Directors, ValueVision Media
Clinton Group, Inc. and certain of its affiliates, officers and
employees intend to make a preliminary filing with the United
States Securities and Exchange Commission ("SEC") of a proxy
solicitation statement to be used to solicit proxies for the
removal of a majority of the directors from the Board, the
expansion of the size of the Board and the election of new
individuals to the Board, among other things.
This communication is not a proxy solicitation, which may be
done only pursuant to a definitive written proxy statement.
About Clinton Group,Inc.
Clinton Group, Inc. is a diversified asset management firm that
is a Registered Investment Advisor. The firm has been investing in
global markets since its inception in 1991 with expertise that
spans a wide range of investment styles and asset classes.
CLINTON SPOTLIGHT MASTER
FUND, L.P., CLINTON MAGNOLIA MASTER FUND, LTD., CLINTON RELATIONAL OPPORTUNITY MASTER FUND,
L.P., CLINTON RELATIONAL
OPPORTUNITY, LLC, GEH CAPITAL, INC., CHANNEL COMMERCE PARTNERS,
L.P., CLINTON GROUP, INC.,
GEORGE E. HALL (COLLECTIVELY,
"CLINTON"), CANNELL CAPITAL LLC,
TRISTAN OFFSHORE FUND, LTD., TRISTAN PARTNERS, L.P., CUTTYHUNK II
FUND LLC, TONGA PARTNERS, L.P. AND
J. CARLO CANNELL (COLLECTIVELY,
"CANNELL") INTEND TO FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") A DEFINITIVE PROXY STATEMENT AND
ACCOMPANYING PROXY CARD TO BE USED TO SOLICIT PROXIES FROM THE
STOCKHOLDERS OF VALUEVISION MEDIA, INC. ("VALUEVISION") IN
CONNECTION WITH THE SPECIAL MEETING OF STOCKHOLDERS OF VALUEVISION
REQUESTED BY CERTAIN OF THE PARTICIPANTS (AS DEFINED BELOW). ALL
STOCKHOLDERS OF VALUEVISION ARE ADVISED TO READ THE DEFINITIVE
PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF
PROXIES FROM THE STOCKHOLDERS OF VALUEVISION BY CLINTON, CANNELL, THOMAS DAVID BEERS, DORRIT M. BERN, MARK
BOZEK, MELISSA B. FISHER,
THOMAS D. MOTTOLA, ROBERT ROSENBLATT
AND FRED SIEGEL (COLLECTIVELY, THE "PARTICIPANTS") WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION,
INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS. WHEN
COMPLETED, THE DEFINITIVE PROXY STATEMENT AND FORM OF PROXY WILL BE
FURNISHED TO SOME OR ALL OF THE STOCKHOLDERS OF VALUEVISION AND
WILL, ALONG WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION,
CLINTON WILL PROVIDE COPIES OF THE
DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD (WHEN
AVAILABLE) WITHOUT CHARGE UPON REQUEST.
SOURCE Clinton Group, Inc.