Clinton Group Rejects ValueVision's Second Attempt To Delay Special Meeting Of
Calls Board's Latest Delay Tactic "Shameful"
NEW YORK, Nov. 18, 2013
NEW YORK, Nov. 18, 2013 /PRNewswire/ --Clinton Group, Inc., which together
with its affiliates and members of its group ("Clinton Group"), owns more than
10% of the outstanding stock of ValueVision Media, Inc. (Nasdaq: VVTV)
("ValueVision" or the "Company"), today announced that it has sent a letter to
the Chairman of the Board of Directors of ValueVision (the "Board") disputing
the alleged deficiencies in its submissions to the Company and demanding a
Special Meeting of Shareholders on the time frame provided under Minnesota
Earlier this month, Clinton Group filed a notice with the Company calling for
a Special Meeting of shareholders at which shareholders would have the chance
to consider Clinton Group's proposals to remove a majority of the ValueVision
directors; expand the Board of Directors to nine members and elect seven
independent director nominees that Clinton Group believes can assist
ValueVision develop and implement a new growth strategy and select an
executive team capable of executing that strategy.
Clinton Group noted that ValueVision contacted the Clinton Group and attempted
to get a voluntary delay of the Special Meeting two weeks ago. When Clinton
Group rejected the Company'srequest for such a delay, ValueVision (with the
help of seven separate professional services firms) announced that it had
discoveredtrivial "deficiencies" – such as a missing digit on a zip code – in
Clinton Group's 150+ page submission. In a press release last Friday,
ValueVision claimed these deficiencies allow it to ignore binding Minnesota
law and set a Special Meeting whenever the Board desires.
"This is a shocking disregardfor shareholder rights," said Gregory P. Taxin,
President of the Clinton Group. "There is no dispute that we own and can vote
more than 10% of ValueVision's shares, which is what is required under
Minnesota law to call a Special Meeting of Shareholders. The only deficiency
in our voluminous submissions appears to bea missing digit on a zip
code.Instead of focusing on creating value for all shareholders, it is clear
the Board would prefer to delay this meeting as long as possible. There is
simply no justification under Minnesota law for ignoring our demand or the
scheduledictated bythe binding law."
In a letter sent to the Chairman of the Board today, the Clinton Group also
noted that ValueVision has now essentially admitted that its Board is
inadequate and that it needs to find additional directors in an "accelerated"
process. The Clinton Group called upon the Board to install the independent
nominees that Clinton Group has already recruited (including the former CEO of
HSN; the former CFO and President of HSN; the former Senior Vice President of
Marketing for QVC; Sony Music's former CEO,Tommy Mottola; Charming Shoppes'
former CEO; a media investment banker; andFremantle N.A.'s CEO) and to "call
off the lawyers, investment bankers, publicists, proxy solicitors, investor
relations professionals and executive recruiters."
A complete copy of the Clinton Group's letter is below:
[Clinton Group Letterhead]
November 18, 2013
Mr. Randy S. Ronning
ValueVision Media Inc.
6740 Shady Oak Road
Eden Prairie, MN 55344
Re: Your Expensive Attempts to Deny Shareholder Rights and
Entrench the Board
Dear Mr. Ronning:
Clinton Group, Inc., its affiliates and members of its group (the "Clinton
Group") collectively own more than 10% of the stock of ValueVision Media Inc.
(the "Company" or "ValueVision"), making us the second largest owner of the
As you know, we are seeking the removal of a majority of the Board of
Directors (the "Board") and the election of seven independent and highly
qualified nominees (the "Nominees"). We believe the business has been
mismanaged and that it can be an extremely profitable and valuable enterprise
if only its uncommon asset were used well by management.
You and your fellow directors are our fiduciaries. We understand that you
believe you are doing a good job, despite the hundredmillion dollarsin
losses incurred, and shrinking market share, during your tenure as Chairman.
We respectfully disagree with your self-assessment and have a right under
Minnesota law to seek your removal and replacement with the consent of our
fellow shareholders. Given your latest actions, you seem intent on spending
millions of the Company's dollars – that is, our money – to delay such an
action by shareholders and prolong your tenure in the $312,000 per year
We are emboldened to know, however, that all the delay tactics your team –
consisting now of two national law firms, an investment bank, a proxy
solicitor, a public relations firm, an investor relations firm and an
executive recruiter – can dream up cannot prevent the inevitable vote.
Eventually, shareholders get to decide whom they want to serve as their
fiduciaries. The harder you fight holding a timely vote, the lower your
chances of surviving that vote. In our experience, shareholders do not much
appreciate directors that toy with the shareholder franchise in blatant
attempts to hold on to power and their excessive director fees.
But given your seeming desire to remain Chairman as long as possible, I can
only imagine how thrilled you were to receive the call from your lawyers –
after they racked up what must have been tens or hundreds of thousands of
dollars in bills we and our fellow shareholders will have to pay – informing
you they had found some technical, trifling reasons to deny us, the undisputed
owner of more than 10% of the Company's stock, our right to call a Special
Meeting. Tell me: Was your enthusiasm lessened when you learned that the
putative reason for denying shareholders a right to vote on your continued
tenure as their fiduciary was that we failed to provide (in one place in our
150+ page submission) the full zip code for our office because a paralegal
accidentally truncated that number to four digits? (In her letter to us
pointing out this mistake, the Company's General Counsel is so giddy about
finding this typo – "Eureka!" – that she underlines the obscure portion of
Minnesota law that defines an "address" as something that "include[s] a zip
Admittedly, that is not the only foible in our submission your expensive
professionals claim to have discovered. There is also the supposedly earth
shattering matter of us addressing one of the two letters to the wrong
ValueVision executive. (We didn't.) Or the one where you claim we put some
information in only one of our two simultaneous submissions and you believe it
should be in both documents. Hogwash.
Perhaps most entertaining is your claim that our real aim in seeking to
replace a majority of the Board and the Chief Executive, after you have
presided over millions in operating losses and significant under-performance
relative to the Company's peers, is so that we could have the privilege of
investing in the Company at a significant premium to the stock price. Our
October 30, 2013 letter could not be clearer on this point. We said that if
the current Board would approve an investment, we would be willing to make one
to demonstrate our conviction that the changes we were proposing would enhance
the value of the stock. We specifically conditioned our offer on the approval
of the current Board and made the offer as a way to further convince the Board
to voluntarily cede power. By rejecting our offer, you have not only
demonstrated again the Board's willingness to trade shareholder value (in this
case in the form of a significant premium) for elongating its own tenure, you
have also precluded us from achieving the rapid upgrade in personnel we sought
without the distraction or expense of a proxy fight. Given your seemingly
tireless efforts to extend your tenure, we are no longer willing to make such
an investment and will not seek or accept any investment directly into the
Company in the future with this Board or any other. (We also note that we are
disabled from making such an investment for at least four years by Minnesota
law now that we own more than 10% of the stock and so we could not make an
investment in the Company even if we wanted to.) We believe being the
Company's second largest owner demonstrates enough conviction.
Also bogus is your claim that we do not have the power to vote at least 10% of
the stock. We provided you, voluntarily, with brokerage statements showing our
ownership stake. There can be no reasonable dispute that we have the power to
instruct our custodians how to vote and that they will, in fact, follow our
instructions as they are contractually bound to do. If we say "vote yes," they
will vote yes. In fact, the entire proxy voting system in the United States
operates on this basis and nothing about Minnesota law affects our contractual
power to vote our shares at the Company's shareholder meetings or any other
shareholder meeting. Our lawyers will be in touch on this technical point and,
if you so demand, we will have it adjudicated by a court.
That being said, we have heard you loud and clear. First you asked us to
voluntarily delay the Special Meeting. When we rejected that request, you
drummed up flimsy excuses to justify your own delay of it. It appears you
intend, through any means – legitimate, technical or petty – devised by the
Company's professional advisory firms to deny shareholders their legitimate
rights to a timely meeting. In your press release, you have seemingly agreed
to hold a meeting in the middle of March – six weeks after the statutory
deadline – although your counsel has informed us the Company refuses to
legally commit to such a meeting. It is clear you want a delay, and you want
complete discretion to postpone or move any meeting, in spite of the
strictures of binding Minnesota law.
We suspect we know why. We surmise your many advisors have convinced you that
in a head-to-head proxy fight between the Company's existing board and the
independent nominees we have recruited, that the incumbents would not fare
well. Indeed, you essentially admit as much in the Company's press release,
where you note that you have hired yet another professional services firm to
assist you in locating new directors. It is too bad you did not have the
foresight to recognize the inadequacy of the Board prior to now, for
shareholders would have been better off and we could all have avoided this
fight. Instead, you have just now turned your attention to recruiting an
appropriate Board; your insistence on a delay of the Special Meeting appears
borne out of a need for time to recruit, finally, adequate board members,
Minnesota law be damned.
While we appreciate all – even belated – efforts to improve the group of
fiduciaries that work on our behalf on the boards of companies we own, in this
instance we have already done the work for you: We have recruited a
world-class group of independent nominees that are substantially more
qualified than the sitting directors and, I believe, significantly better than
the Boards of any peer company. While I know they are not directors that you
have personally chosen – and therefore perhaps they are suspect in your mind –
they bring decades of successful experience in the home shopping, online
commerce, merchandising, retailing and media and entertainment fields as
senior executives and Board members. And, they are ready to begin working
tomorrow on behalf of all shareholders.
Randy, we do not need to wait until March and the shareholders do not need to
incur significant executive search fees. Let's face it: You've admitted your
current Board needs to be augmented and that it would likely lose to the
independent nominees we have selected. For the good of all shareholders, let's
just agree to get our nominees working now. Call off the lawyers, investment
bankers, publicists, proxy solicitors, investor relations professionals and
executive recruiters (and all their unavailing and flimsy delay tactics) and
do the right thing as a fiduciary: Put in place the strong Board we have
recruited. It, in turn, can quickly replace the under-performing management
team. At a minimum, you should hold the Special Meeting we have called in the
timeframe required under Minnesota law.
I suspect, given what we have seen so far, that you will reject these sensible
approaches in favor of further combat. All shareholders will be worse off for
that. Perhaps that does not bother you as much as the thought of losing your
Gregory P. Taxin
cc: Board of Directors, ValueVision Media
Clinton Group, Inc. and certain of its affiliates, officers and employees
intend to make a preliminary filing with the United States Securities and
Exchange Commission ("SEC") of a proxy solicitation statement to be used to
solicit proxies for the removal of a majority of the directors from the Board,
the expansion of the size of the Board and the election of new individuals to
the Board, among other things.
This communication is not a proxy solicitation, which may be done only
pursuant to a definitive written proxy statement.
About Clinton Group,Inc.
Clinton Group, Inc. is a diversified asset management firm that is a
Registered Investment Advisor. The firm has been investing in global markets
since its inception in 1991 with expertise that spans a wide range of
investment styles and asset classes.
CLINTON SPOTLIGHT MASTER FUND, L.P., CLINTON MAGNOLIA MASTER FUND, LTD.,
CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P., CLINTON RELATIONAL
OPPORTUNITY, LLC, GEH CAPITAL, INC., CHANNEL COMMERCE PARTNERS, L.P., CLINTON
GROUP, INC., GEORGE E. HALL (COLLECTIVELY, "CLINTON"), CANNELL CAPITAL LLC,
TRISTAN OFFSHORE FUND, LTD., TRISTAN PARTNERS, L.P., CUTTYHUNK II FUND LLC,
TONGA PARTNERS, L.P. AND J. CARLO CANNELL (COLLECTIVELY, "CANNELL") INTEND TO
FILE WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") A DEFINITIVE
PROXY STATEMENT AND ACCOMPANYING PROXY CARD TO BE USED TO SOLICIT PROXIES FROM
THE STOCKHOLDERS OF VALUEVISION MEDIA, INC. ("VALUEVISION") IN CONNECTION WITH
THE SPECIAL MEETING OF STOCKHOLDERS OF VALUEVISION REQUESTED BY CERTAIN OF THE
PARTICIPANTS (AS DEFINED BELOW). ALL STOCKHOLDERS OF VALUEVISION ARE ADVISED
TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE
SOLICITATION OF PROXIES FROM THE STOCKHOLDERS OF VALUEVISION BY CLINTON,
CANNELL, THOMAS DAVID BEERS, DORRIT M. BERN, MARK BOZEK, MELISSA B. FISHER,
THOMAS D. MOTTOLA, ROBERT ROSENBLATT AND FRED SIEGEL (COLLECTIVELY, THE
"PARTICIPANTS") WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS.
WHEN COMPLETED, THE DEFINITIVE PROXY STATEMENT AND FORM OF PROXY WILL BE
FURNISHED TO SOME OR ALL OF THE STOCKHOLDERS OF VALUEVISION AND WILL, ALONG
WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE
AT HTTP://WWW.SEC.GOV. IN ADDITION, CLINTON WILL PROVIDE COPIES OF THE
DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD (WHEN AVAILABLE)
WITHOUT CHARGE UPON REQUEST.
SOURCE Clinton Group, Inc.
Contact: Connie Laux, Clinton Group, Inc., +1-212-825-0400 or Bruce H.
Goldfarb/Lydia Mulyk, Okapi Partners LLC, +1-212-297-0720.
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