- Sandell Asset Management had proposed six candidates for board
- Shareholder also had lobbied Ethan Allen to sell real estate
Ethan Allen Interiors Inc. shareholders rejected all six directors nominated by hedge fund Sandell Asset Management Corp., pushing back on the activist investor’s campaign for the furniture chain to offload its real estate.
“We are disappointed that the preliminary results indicate that our nominees were not ultimately elected to the company’s board,” Sandell said in a statement on Tuesday. “However, we are encouraged that our involvement has been able to heighten investor awareness regarding a number of troubling governance issues, several of which the company has subsequently sought to address.”
The outcome means Ethan Allen is less likely to explore the prospect of selling or spinning off its real estate -- a strategy that has been frequently promoted by activists in recent years. Sandell has criticized Ethan Allen for subpar growth that has trailed peers.
Ethan Allen shares fell 1.7 percent to $28.15 as of 11:23 a.m. in New York.
Tom Sandell, the firm’s founder, revealed the fund’s stake on July 15, calling Ethan Allen an attractive buyout candidate. He calculated that it could be worth $40 a share if it spun off properties into a real estate investment trust.
Founded in 1998, Sandell recently won four board seats in a proxy contest at Bob Evans Farms Inc. and successfully pushed the restaurant chain to explore a sale or spinoff of some of its real estate.