Starboard Value LP, the activist hedge fund seeking to replace Newell Brands’ board, plans to press ahead with a proxy fight at Newell Brands Inc. despite the company giving billionaire investor Carl Icahn four board seats, according to a regulatory filing.
Jeffrey Smith at Starboard wrote in part in the filing, “While the agreement with Mr. Icahn gives the appearance of substantial change, and the expanded transformation plan is a step in the right direction, we question the circumstances and motivation that drove such an accord. Our sole motivation is to ensure the most qualified directors are in place to make Newell a stronger, more profitable and ultimately more valuable company, while ensuring that the best interests of all stockholders are appropriately represented in the boardroom.”
The full letter follows:
Dear Fellow Newell Stockholders:
Starboard Value and Opportunity Master Fund Ltd (together with its affiliates, “Starboard,” or “we”) and the other participants in this solicitation are the beneficial owners of an aggregate of 18,608,298 shares of common stock, $1.00 par value per share (the “Common Stock”), of Newell Brands Inc., a Delaware corporation (“Newell” or the “company”), representing approximately 3.8% of the outstanding shares of Common Stock of the company. For the reasons set forth in the attached Proxy Statement, we believe changes to the composition of the Board of Directors of the company (the “Board”) are necessary in order to ensure that the company is being run in a manner consistent with your best interests. We are seeking your support for the election of our [∙] nominees at the company’s annual meeting of stockholders scheduled to be held on Tuesday, May 15, 2018, at 9:00 a.m. local time at the W Hotel Hoboken, 225 River Street, Hoboken, New Jersey 07030 (including any adjournments or postponements thereof and any meeting which may be called in lieu thereof, the “Annual Meeting”).
We are seeking to elect a minority of the Board because we do not believe that the recent changes at the company, including the agreement with Carl C. Icahn, are sufficient to address Newell’s subpar operating and financial performance. We believe poor execution and a series of operational missteps have resulted in severe share price underperformance compared to both industry peers and the broader market. Therefore, we believe that the current situation is unacceptable.
In addition, we remain disturbed by the turnover at the Board level. In late January 2018, three well-respected directors of Newell, Ian G.H. Ashken, Domenico De Sole and Martin E. Franklin, simultaneously resigned from the Board, indicating to us that there were differences of opinion in the boardroom as to the company’s strategic direction moving forward. Shortly thereafter, two additional directors, Ros L’Esperance and Kevin C. Conroy, also resigned from the Board. We believe that the departures of these directors left a void in the boardroom and we are not convinced that the agreement with Mr. Icahn, which included the appointment of three of his direct representatives, will result in the necessary change at Newell.
We believe that the following public statement by Mr. Conroy following his resignation from the Board in March demonstrates the need for change at Newell: “I resigned because I do not believe that the current course is the optimal path forward for the company. I am not comfortable with recent events and have come to believe that change is needed.” Based on recent developments, it appears that the company agrees change is needed. Now, it is about making sure that the right change is effected.
While the agreement with Mr. Icahn gives the appearance of substantial change, and the expanded transformation plan is a step in the right direction, we question the circumstances and motivation that drove such an accord. Our sole motivation is to ensure the most qualified directors are in place to make Newell a stronger, more profitable and ultimately more valuable company, while ensuring that the best interests of all stockholders are appropriately represented in the boardroom. Starboard has nominated an experienced and accomplished group of director candidates with a shared mission of helping to oversee a turnaround of Newell.
As explained in the attached Proxy Statement, our slate of director candidates collectively possess decades of experience serving as CEOs, CFOs, COOs, senior executives and directors of well-performing public companies directly related to Newell’s business. Our nominees are prepared to work with their fellow Board members, if elected, to continue to refine and implement a comprehensive strategic plan aimed at unlocking the full potential of Newell’s portfolio of industry-leading brands and ensuring that the interests of all stockholders are of paramount importance.
We firmly believe that there is significant value to be realized at Newell, and we are confident that our nominees are the right candidates to help reverse the downward trend in the company’s performance and deliver this value for stockholders.
The company has disclosed that there are eleven (11) directorships up for election at the Annual Meeting. Through the attached Proxy Statement, we are seeking your support at the Annual Meeting to elect not only our [∙] nominees, but also the candidates who have been nominated by the company other than [_________]. This gives stockholders who wish to vote for our nominees the ability to vote for all eleven (11) directorships up for election. Stockholders should refer to the company’s proxy statement for the names, backgrounds, qualifications and other information concerning the company’s nominees. Your vote to elect our nominees will have the legal effect of replacing [∙] incumbent directors with our nominees.
We urge you to carefully consider the information contained in the attached Proxy Statement and then support our efforts by signing, dating and returning the enclosed BLUE proxy card today. The attached Proxy Statement and the enclosed BLUE proxy card are first being mailed to stockholders on or about ____________, 2018.
If you have already voted for the incumbent management slate, you have every right to change your vote by signing, dating and returning a later dated BLUE proxy card or by voting in person at the Annual Meeting.
If you have any questions or require any assistance with your vote, please contact Okapi Partners LLC, which is assisting us, at the address and toll-free numbers listed below.
|Thank you for your support.|
|/s/ Jeffrey C. Smith|
|Jeffrey C. Smith|
|Starboard Value and Opportunity Master Fund Ltd|
Newell Brands brands include Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, Coleman, Jostens, Marmot, Rawlings, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Rubbermaid, Contigo, First Alert, Waddington and Yankee Candle.
Newell’s Play segment overall includes Berkley, Shakespeare, Abu Garcia, Penn, Ugly Stik, Rawlings, Coleman, Contigo, Marmot, Aerobed, Camping and Sterns. The brands are all part of the Jarden Outdoor segment. Jarden Corp was acquired by Newell in 2016.