Activist Investor Calls ShopHQ’s Actions “Surreptitious”
The Clinton Group has not dropped its effort to oust ValueVision Media’s CEO and some board members, and while it agreed the shareholders meeting doesn’t need to occur during the holiday season, it doesn’t want the meeting pushed past January.
The New York-based investment group on Monday requested a special shareholders meeting to discuss its proposal—which it announced last week—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, which sells everything from jewelry to consumer electronics to beauty treatments on its website and television channel, on Tuesday asked Clinton to withdraw its meeting request, stating that it’s in the best interest of shareholders for such a meeting to be delayed until after the holiday season. ValueVision brands itself as “ShopHQ,” a moniker that replaced its well-known “ShopNBC” brand name in May.
“As a retailer, ValueVision’s busiest season comes during the holiday season, which is now upon us,” the company wrote. “It is vitally important for our management team to remain laser focused on executing our company’s strategy in order to maximize value creation for our shareholder base as a whole.”
Clinton, which previously held about 5 percent of ValueVision’s stock, recently joined with fellow hedge fund Cannell Capital, and together they hold more than 10 percent of ValueVision’s shares.
On Wednesday, Clinton responded to ValueVision’s request for a delay. It argued that ValueVision was “surreptitiously” seeking to delay the special meeting a full six months with a “sympathetic public plea that Christmas is in seven weeks.”
The investment group said that under Minnesota law, if it re-files its meeting request in February—as ValueVision asked—then ValueVision would have as late as May before it would need to schedule a meeting.
“We will not be so easily misled or give up our rights as shareholders in a Minnesota corporation,” Clinton wrote. “We do not believe shareholder interests are well-served by a delay. If avoiding distractions during the holiday shopping season is your true motivation, we reiterate our suggestion to call a late January meeting.”
A ValueVision representative declined to comment on Clinton’s most recent request.
Shares of ValueVision’s stock were trading down about 2 percent at $5.23 during late Wednesday morning trading.
Click here to learn more about ValueVision’s back-and-forth with Clinton and its financial history since Stewart took over as CEO.