Performance Sports Group (PSG) Ltd. disclosed that W. Graeme Roustan, its former chairman, plans to launch a proxy battle for a seat on the company’s board.
The company, which owns the Bauer, Mission, Maverik, Cascade, Inaria, Combat, and Easton brand names, is recommending that shareholders reject Roustan’s nomination at its annual meeting on Oct. 14 in New York.
In 2008, PSG, formerly known as Bauer Performance Sports Ltd., was sold by Nike to Kohlberg & Co., which appointed Roustan as chairman. The company went public in 2011 in Toronto and Roustan resigned as chairman in 2012. He holds around a 1.3 percent stake in PSG.
According to proxy materials, Roustan first approached PSG’s board to seek a seat in January 2015 only to be rejected. A subsequent he sent to the board in May questioned the company’s imminent opening of its first “Own the Moment” Bauer Hockey retail stores. PSG plans to open eight to 10 hockey-themed stores over the next two to four years in North America.
Roustan has made several more failed attempts to get on the board since, and finally in mid-August offered not to launch a fight if the board agreed to pay for some of his expenses, according to the proxy material. The board rejected that proposal because the cost was deemed to be too high, according to documents. Roustan has not public responded to the latest board maneuvers.
The potential proxy fight comes as PSG’s shares have slid nearly 30 percent since its third-quarter results were released in April, impacted by the lower Canadian dollar.
In a statement, PSG said, “It is unfortunate that Mr. Roustan has decided to engage in an unnecessary and costly proxy contest at a time when it is clear that the company is successfully implementing its corporate strategy, capturing market share, and driving performance.”
The company noted that since its IPO in 2011, PSG has “consistently demonstrated an ability to drive growth across its sports brands,” including hockey, baseball and lacrosse. On a currency-neutral basis, sales in all of its businesses are expected to grow faster than their underlying markets, and profits faster than revenues. Since 2008, seven acquisitions have been completed and integrated “that have bolstered sales and increased market share in an increasingly competitive industry.”
Furthermore, PSG said its current board is comprised of “nine highly-qualified individuals,” including eight whom are independent. Said PSG, “Our directors’ broad and complementary set of skills and experience make them well qualified to serve and represent the best interests of all of our shareholders.”
