Hill International Urged to Explore Sale by Activist Bulldog

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Hill International Inc., the construction manager that rejected a buyout offer last week, is being told by activist shareholder Bulldog Investors it should hire bankers to explore a sale.

The real estate-focused activist firm has amassed more than 5 percent of Hill International and will run a proxy fight to replace two board members at the company’s June 9 annual meeting, said Andrew Dakos, who runs Bulldog with Phil Goldstein.

The fund manager met last month with the company, which rebuffed its suggestion that management review strategic options, Dakos said Thursday by phone. Bulldog began buying Hill International shares last year, and will file a 13D and preliminary proxy papers Friday. The hedge fund Thursday separately filed a lawsuit over the company’s advanced notification requirements for shareholder proposals and nominations.

“We recently received stockholder proposals and director nominations from a small activist firm that were both untimely and substantively deficient,” Hill Chief Executive Officer David L. Richter said Thursday in an e-mailed statement. “We advised them of these deficiencies and that they would not be considered at this year’s annual stockholders meeting. They have filed a complaint with the Delaware Chancery Court to overturn our decision, but we are confident that we are correct on the legal issues and that the court will agree with the position we have taken.”

Unsolicited Bid

Hill International said May 5 its board rejected an unsolicited $5.50-a-share bid from private equity group DC Capital Partners as too low and adopted a poison pill to deter further unwanted takeover efforts. The building consultant has an enterprise value of about $388 million and 100 offices globally.

“Hill’s management team has a strategic plan in place that we believe will significantly increase stockholder value,” Richter said in the statement last week. “We believe that DCCP’s extremely inadequate offer attempts to hijack this value creation away from our existing public stockholders and put it into their private pockets.”

Bulldog in March reached a settlement with title-insurer Stewart Information Services Corp. that avoided a proxy fight.

Goldstein has said he named his activist hedge-fund firm, based in Saddle Brook, New Jersey, Bulldog to represent tenacity. The firm, which manages about $600 million, has run more than 40 proxy fights and typically targets funds that trade at a discount to net asset value, as well as real estate and insurance-related companies.