Neuberger Berman Ups Ultratech Fight for Two Board Seatsby
Fund manager criticizes company under leadership of CEO
Asset manager holds about 7.6% of Ultratech outstanding stock
Neuberger Berman Group, the investment manager waging a rare activist proxy fight at Ultratech Inc., escalated its attack, criticizing the performance of the maker of lights and lasers for the technology sector.
Under the leadership of Ultratech’s founder, Chairman and Chief Executive Officer Art Zafiropoulo, 77, the company’s shares have fallen and sales have shrunk, Neuberger Berman wrote in a letter released Monday. It also criticized his stock sales and other benefits, including the company’s sponsorship of a racing team affiliated with a sports-car dealership owned by Zafiropoulo.
Representatives for Ultratech did not immediately respond to calls and e-mails seeking comment outside of regular business hours.
The asset manager is Ultratech’s third-largest shareholder with about 7.6 percent of outstanding stock. It said April 21 it was nominating tech executive Beatriz V. Infante and Rambus Inc. CEO Ronald Black as dissident director candidates for the company’s seven-member board, after filing as an active investor in August.
Ultratech responded April 22 saying it had “numerous discussions” with Neuberger and was working toward refreshing its board.The company added that neither of the shareholder’s nominees “had the applicable business and industry expertise.”
A public activist campaign is unusual for Neuberger Berman, which typically holds passive stakes in public securities or for other investors. The asset manager has owned Ultratech for more than a decade. In Monday’s letter it accused the company of paying Zafiropoulo more in the past 10 years than the profit it generated for stockholders since 2001.
“We are patient, long-term investors. But even our extraordinary patience has its limits,” Neuberger Berman wrote. “There have been no returns; there should be tough questions; and there should be accountability.”
San Jose, California-based Ultratech makes lights and lasers used in the manufacture of semiconductor and nanotechnology devices. Founded in 1979, the company’s shares are up 16 percent this year, giving it a market capitalization of about $615 million.