Vivus Delays Annual Meeting on Eve of Board Proxy VoteMeg Tirrell
Vivus Inc., the drugmaker battling its largest shareholder for board control, pushed its annual meeting back three days while claiming the dissident investor made misleading statements about a proxy adviser recommendation.
The annual meeting, which was scheduled for today, will now be held July 18, Mountain View, California-based Vivus said in a statement late yesterday. The company said it also reported comments by dissident shareholder First Manhattan Co. about the proxy fight to the U.S. Securities and Exchange Commission and asked the regulator to require “corrective actions.”
First Manhattan, which controls 9.9 percent of Vivus shares outstanding, said it “strongly disagrees” with the allegation that it made misleading comments. Vivus’s actions are “a pretense to buy time in an attempt to improperly influence the election,” First Manhattan said in a statement today. The investor said it will consider options, including legal action, to “protect the rights of Vivus’s shareholders.”
“We wouldn’t rule out some form of a compromise just yet,” Lee Kalowski, an analyst with Credit Suisse, wrote in research note today. “One sticking point seems to be that FMC has wanted a majority share of the board and this is something the Vivus board/management says it would be unable to offer due to its fiduciary obligations.”
First Manhattan has proposed a slate of nine directors to replace Vivus’s entire board, and has said it would name a new chief executive officer. The proxy fight has focused on Vivus’s marketing strategy for the obesity drug Qsymia, approved in July 2012 by the Food and Drug Administration and drawing $4.1 million in first-quarter revenue.
Vivus lost more than half its market value in the 12 months ended in June. The shares rebounded 17 percent in the past two weeks as investors speculated the dissidents may gain ground. Vivus fell 1.4 percent to $14.49 at the close today in New York.
The drugmaker said that paid advisers to First Manhattan made “false and misleading statements” about the recommendation of Institutional Shareholder Services. The proxy adviser gave its backing to three directors on the dissident side earlier this month: Alex Denner, Michael Astrue and David Norton. Over the weekend, Vivus said it invited three First Manhattan director nominees to join the board in an attempt to reach a compromise.
Last week, Vivus’s third-largest shareholder, QVT Financial LP, was reported to be planning to vote its 8.35 million shares for the dissident slate. Both Vivus and First Manhattan said last week they were open to settlement discussions.