Sun seeks seats on FBI's board
By Larry Thomas -- Furniture Today, April 6, 2008
Boca Raton, Fla. — Rebuffed in an earlier effort to buy Furniture Brands International, Sun Capital Partners now says it will nominate its own slate of directors for the company's annual meeting on May 1.
Furniture Brands Chairman Mickey Holliman said in reply that the FBI board is "disappointed" by Sun Capital's latest action and said a proxy fight would be "costly and disruptive."
"A proxy contest can only serve as a distraction to the company when attention and resources would be better used in creating value for shareholders by implementing our strategic plan," Holliman said in a statement issued by the company.
Sun Capital, whose affiliates own 4.58 million shares or about 9.45% of FBI's stock, also said in a regulatory filing that it has asked FBI for its most current list of stockholders so it can solicit proxy votes for its proposed directors.
The Sun Capital filing, submitted March 28 to the Securities and Exchange Commission, didn't say how many people it planned to nominate for board seats or divulge the names of the proposed candidates.
In a letter to Ralph Scozzafava, vice chairman and CEO of Furniture Brands, Sun Capital said it would seek a court order to get the stockholder information if FBI refused to comply with the request.
In February, Sun Capital sent FBI a letter saying it was interested in acquiring all of the company's stock. FBI's directors took no direct action, saying the letter didn't include an offering price and didn't provide "any meaningful basis upon which to evaluate the letter."
In its most recent statement, Furniture Brands noted that Sun Capital "has a mixed record of performance in the home furnishings industry," pointing out that several of its industry holdings are operating under bankruptcy protection.
One of those entities, Top 100 retailer Wickes Furniture, owes more than $2 million to various Furniture Brands business units, the statement said.
Furniture Brands said the investment firm's ownership stakes in several other furniture manufacturers could put FBI at a competitive disadvantage if the company were required to share proprietary information.
"While a disruptive proxy contest would not be a preferable course of action, the company will continue to maximize the interests of stockholders consistent with our goal of delivering high performance and long-term stockholder value," Holliman added.
FBI's proxy statement, filed with the SEC on March 31, lists eight directors up for re-election and doesn't mention a possible contest with Sun Capital nominees.
At the 2007 annual meeting, 10 directors were re-elected, but three have left the board since then. Scozzafava joined the board in June when he was hired.
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