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Activist Investor Calls Foul, Won’t Attend ShopHQ Meeting

The Clinton Group claimed in a recent letter that ValueVision broke state law by not holding a special shareholders meeting 90 days after it was requested—but the Minnesota company argues that Clinton’s original request was invalid.

In the latest in a series of letters to Eden Prairie-based ValueVision Media, Inc., activist investor Clinton Group said ValueVision unlawfully delayed a requested shareholder meeting, and Clinton no longer plans to attend the planned meeting in March.
 
In November, the New York-based investment group requested a special shareholders meeting to discuss its proposal—which it announced in late October—to replace ValueVision CEO Keith Stewart, along with the majority of the company’s directors and board members, who Clinton alleges are mismanaging the company and causing it to “dramatically under-perform” its rivals.
 
ValueVision has adamantly denied such allegations. The company sells everything from jewelry to consumer electronics to beauty treatments on its website and television channel. It brands itself as “ShopHQ,” a moniker that replaced its well-known “ShopNBC” brand name in May.
 
In ValueVision’s previous responses to Clinton, the company said that it fully supports its management team, that Clinton’s meeting request letter contained “deficiencies” that require the group to submit a new letter, and that the shareholder group did not hold a “sufficient percentage of the company’s shares” to demand this type of special meeting.
 
Clinton, which previously held about 5 percent of ValueVision’s stock, joined with fellow hedge fund Cannell Capital in November, and together they claim to hold more than 9 percent of ValueVision’s shares.

According to public documents filed by ValueVision, the company states that a shareholder group must hold 25 percent or more of the company’s shares to call for this type of special meeting.
 
Despite ValueVision’s assertion that Clinton had no right to demand such a meeting, the Minnesota company scheduled the meeting for March 14, two months later than Clinton had requested. At the time, ValueVision said a meeting in January would have interfered with its “vital” holiday season retail efforts.
 
Clinton is now claiming that ValueVision failed to hold the special meeting within 90 days of its request—that window closed Sunday—which according to Clinton is in violation of Minnesota law. ValueVision, meanwhile, denied Clinton’s right to request the meeting in the first place.
 
A ValueVision representative declined to comment on Clinton’s most recent letter but the company announced Wednesday that it had cancelled the special shareholders meeting on the news that Clinton would not be attending.
 
“I do not know if the company will hold the meeting without us,” Clinton President Gregory Taxin told Twin Cities Business. “They are claiming they were holding the meeting even though our demand for a special meeting was, in their view, defective, so I’m not sure what they will do from here.” 
 
In its recent letter, Clinton said it will not “relent in its efforts to rectify” ValueVision’s executive management talent and plans to address its concerns at the company’s annual meeting in June.
 
To read Clinton’s full letter, click here.
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