Fisher Communications, Inc. (NASDAQ: FSCI), a leader in local media
innovation, today announced that it filed definitive proxy
materials with the U.S. Securities and Exchange Commission for its
2011 Annual Meeting and that it has commenced the mailing of those
materials to qualified shareholders. Fisher shareholders of record
as of the close of business on March 9, 2011 are entitled to vote
at the Annual Meeting scheduled to take place in Seattle on May
11th.
The Company included the following letter in its mailing to
shareholders:
April 12, 2011
Dear Fellow Fisher Communications, Inc. ("Fisher")
Shareholder:
We are writing to ask for your support on an important matter
regarding the future of your Company. As you may know, David Lorber
and FrontFour Capital Group ("FrontFour"), a Connecticut-based
hedge fund, has submitted a slate of four nominees for election to
Fisher's Board of Directors. If elected, FrontFour's four nominees
and Mr. Lorber would constitute a majority of the Board, thus,
taking control of Fisher. We are asking that you reject the
FrontFour nominees and instead elect the highly qualified and
experienced candidates being proposed by your Board of
Directors.
FRONTFOUR IS SEEKING TO TAKE CONTROL OF FISHER
AT THE EXPENSE OF OTHER SHAREHOLDERS AND REALIZE A SHORT-TERM
GAIN
Mr. Lorber is a sitting Fisher director who is also a member of
the Board of Trustees of Huntingdon Real Estate Investment Trust
("Huntingdon"), a Canadian REIT that owns commercial real estate,
including warehouses, industrial buildings and parking lots.
FrontFour is the largest shareholder of Huntingdon. Huntingdon's
Chief Executive Officer and Trustee, Zachary George, is Mr.
Lorber's co-founding partner of FrontFour. In December 2010,
Huntingdon, a REIT with a market cap of approximately $100 million,
made an unsolicited proposal to acquire Fisher at an implied offer
price of only $23.99. The Huntingdon proposal, which would have
required that our shareholders exchange their Fisher stock for
shares in Huntingdon, or a combination of cash and Huntingdon
shares, was unanimously rejected by Fisher's voting Board
members.
Mr. Lorber has criticized the Board for its quick rejection of
the Huntingdon proposal; however, the equity markets quickly
confirmed the Board's assessment. Fisher's most recent closing
share price on April 11, 2011 was $29.86, approximately 25% higher
than the value implied by the Huntingdon December 2010 proposal.
Furthermore, our Board, including Mr. Lorber, was very well
informed about Fisher's value at that time. Last July, the Board
received a non-public assessment from a financial advisor working
for the Board concluding that valuations of broadcast assets were
near all-time lows and as a result, the environment for
transactions in the industry remained weak. Several months later,
just weeks before Huntingdon made its unsolicited proposal for
Fisher, the Board received a very positive, non-public update on
Fisher's fourth quarter financial performance from management.
FrontFour's ownership interest in Huntingdon, and the
affiliation of Mr. George and Mr. Lorber with Huntingdon, create a
direct conflict of interest between its (and Mr. Lorber's)
interests and the interests of our other shareholders. Had our
Board pursued the Huntingdon proposal, then all Fisher shareholders
would have received a poor value for their Fisher stock. However,
as Huntingdon's largest shareholder, FrontFour would have directly
benefitted from the low value proposed for Fisher. Mr. Lorber's
affiliation with Huntingdon, FrontFour and Fisher raises obvious
questions about whether he is focused on serving the shareholders
and investors of Huntingdon, FrontFour or Fisher.
You should also note that FrontFour has not been a long-term
significant Fisher shareholder. Instead, it is a hedge fund that is
focused on reaping a significant short-term gain. FrontFour
currently owns approximately 2% of Fisher's shares, over 90% of
which have been purchased since May 4, 2010 at prices ranging from
$14.21 to $18.81 per share, while Mr. Lorber has been a member of
the Fisher Board and generally during periods in which Fisher stock
traded at depressed levels.
After Huntingdon's unsuccessful and opportunistic attempt to buy
the Company in December, Mr. Lorber and FrontFour are now trying to
take control of your Company through a proxy contest. Furthermore,
FrontFour is seeking to gain control of Fisher without any control
premium being offered to the rest of the shareholders. If
successful, FrontFour says it intends to initiate a sale process
for the Company. It would be doing so at a time when valuations of
broadcasting stocks remain near the bottom of the market. They have
already made up their mind about the future of Fisher and have put
forward no plan for how they would operate the business, either
before, during or after the sales process or how they would honor
their fiduciary duties to all shareholders. Instead, their sole
proposal for value creation is to allow four non-broadcasters to
join with Mr. Lorber in attempting an ill-timed auction of the
Company to potential buyers that may in fact include
Huntingdon.
As a shareholder, you should ask yourself whether you want
directors who are blindly committed to selling your Company,
potentially to an affiliated entity, without knowledge of the
industry. Your Board encourages you not to allow your Company to be
hijacked by Mr. Lorber with the aid of one of his hedge fund
partners and handpicked designees, who appear to be focused only on
providing FrontFour with a short-term gain.
FRONTFOUR'S INACCURATE AND MISLEADING
STATEMENTS
Fisher's 2010 Financial Results
FrontFour's preliminary proxy statement, which was filed with
the Securities and Exchange Commission on March 21, 2011, provided
a misleading picture of Fisher's performance. FrontFour asserted
that Fisher's "poor operational and stock performance" was a
concern, citing results and stock performance information through
2009. FrontFour's filing conveniently omitted more recent and
publicly available 2010 results, which demonstrate greatly improved
performance, in order to deceptively create a false impression of
Fisher's current condition.
The reality is that in 2010, Fisher's consolidated revenue
increased 32% from 2009, EBITDA(1) grew approximately 400%, and
television revenue was up 40% -- all of which were peer-leading
results. In addition, TV Broadcast Cash Flow margins expanded
significantly. Your Company now enjoys one of the strongest balance
sheets in the broadcasting industry, with $52.9 million in cash and
cash equivalents on hand as of December 31, 2010. Moreover, during
the past 24 months, the Company has used its strong cash position
to reduce its total debt by about 34% -- from $150 million to $98.8
million -- which does not include a $20 million senior notes
redemption currently underway.
(1) Additional information about the calculation of EBITDA can
be found on our investor relations website at
http://investor.fsci.com.
The improved results have not gone unnoticed to the investment
community. On a trailing 12-month basis as of March 22, 2011 --
prior to the Company's disclosure that it would explore the
possible sale or financing of Fisher Plaza -- Fisher's common stock
outperformed its peer group and the S&P 500 by a significant
margin.
Fisher's Corporate Governance
The FrontFour preliminary proxy statement criticizes the Fisher
Board for questionable corporate governance practices. In
particular, FrontFour and Mr. Lorber criticize the Board for not
implementing a proposal to declassify the Company's Board of
Directors that passed a shareholder vote in 2009. FrontFour's proxy
statement notes that "the Board ultimately decided not to enact the
non-binding proposal." What FrontFour fails to mention, however, is
that at a December 2009 meeting, Mr. Lorber joined all present
directors in the Board's unanimous decision not to implement the
declassification of the Board of Directors.
FISHER IS ON TRACK TO CONTINUE DELIVERING
SHAREHOLDER VALUE
Last year marked the fifth consecutive year in which Fisher
stations increased their share of television market revenue and
television advertising growth rates. Fisher has grown share by
improving ratings, strengthening performance in key advertising
categories, and taking market share from competitors. Our
television and radio stations continue to deliver distinguished
news and quality programming which is reflected in our strong
operational performance company-wide. The Company is
well-positioned to continue delivering growth and creating
shareholder value. Now is not the time to disrupt our operational
and financial momentum -- that is why a vote for Fisher's
candidates is a vote for shareholder value.
SUPPORT YOUR BOARD'S HIGHLY QUALIFIED NOMINEES
BY VOTING THE WHITE PROXY CARD
We recommend that you stop FrontFour's attempt to seize control
of your Company by supporting our four highly qualified nominees --
Anthony B. Cassara, Richard L. Hawley, Roger L. Ogden and Michael
D. Wortsman. In contrast to the FrontFour nominees, our candidates
have nearly 100 combined years of broadcast experience and have
successfully created shareholder value at other companies in our
industry. Our slate also includes Richard Hawley, our audit
committee chair and financial expert who has over 37 years of
professional experience, including serving as a partner of an
international public accounting firm and current service as the
chief financial officer of a Fortune 1000 public company, as well
as previous experience as chief financial officer of a Fortune 500
company. You can read more about their qualifications in the
attached definitive proxy statement. While FrontFour's actions
demonstrate a preoccupation with their own short-term financial
gain at the expense of other shareholders, Fisher's nominees are
committed to representing the interests of all shareholders.
You can vote FOR Fisher's nominees and AGAINST FrontFour's
candidates by simply signing, dating and returning the enclosed
WHITE proxy card promptly in the postage-paid envelope provided, or
by following the easy instructions to vote by telephone or
Internet.
We strongly urge you not to allow a hedge fund that has an
obvious conflict of interest to halt Fisher's progress. You can do
so by disregarding any materials you may receive from FrontFour and
not sending in any green proxy cards.
Thank you for your continued support.
Sincerely,
Paul A. Bible Richard L. Hawley
Colleen B. Brown Brian P. McAndrews
Anthony B. Cassara George F. Warren, Jr.
Donald G. Graham, III William W. Warren, Jr.
Michael D. Wortsman
If you have any questions or need assistance in voting your
shares, please call:
Georgeson
199 Water Street, 26th Floor New York, NY 10038 (866) 821-0284 (Toll Free)
Banks and Brokerage Firms please call: (212) 440-9800 Email:
fishercommunications@georgeson.com
About Fisher Communications, Inc.
Fisher Communications (FSCI) is an innovative local media
company with television, radio, internet and mobile operations
throughout the western United States. Fisher operates 13 full power
television stations and 7 low power television stations which
include network affiliations with ABC, CBS, FOX, Univision and CW
that reach 3.5% of U.S. television households, and 10 radio
stations targeting a full range of audience demographics. Fisher
Interactive Network, its online division, produces more than 125
local and hyper-local websites and delivers comprehensive
multiplatform advertising solutions to local businesses. The
Company also owns and operates Fisher Plaza, a 300,000 square foot
media, telecommunications, and data center facility located near
downtown Seattle. The Company is headquartered in Seattle, WA. For
more information about Fisher Communications, Inc., go to
www.fsci.com.
Forward-Looking Statements
This news release includes forward-looking statements. We have
based these forward-looking statements on our current expectations
and projections about future events. Forward-looking statements
include information preceded by, followed by, or that includes the
words "guidance," "believes," "expects," "intends," "anticipates,"
"could," or similar expressions. For these statements, the Company
claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. The forward-looking statements contained in this news
release, concerning, among other things, changes in revenue, cash
flow and operating expenses, involve risks and uncertainties, and
are subject to change based on various important factors, including
the impact of changes in national and regional economies, our
ability to service and refinance our outstanding debt, successful
integration of acquired television stations (including achievement
of synergies and cost reductions), pricing fluctuations in local
and national advertising, future regulatory actions and conditions
in the television stations' operating areas, competition from
others in the broadcast television markets served by the Company,
volatility in programming costs, the effects of governmental
regulation of broadcasting, industry consolidation, technological
developments and major world news events. Unless required by law,
we undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this news
release might not occur. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this release. For more details on factors that could affect
these expectations, please see the risk factors in our Annual
Report on Form 10-K for the year ended December 31, 2010, which we
filed with the SEC on March 8, 2011.
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Media Contact: Sard Verbinnen & Co Paul Kranhold /
Ron Low / David Isaacs (415) 618-8750 Investor Contacts:
Fisher Communications, Inc. Hassan Natha Vice President and Chief
Financial Officer (206) 404-6738 Georgeson Donna M. Ackerly Senior
Managing Director - Corporate Proxy (212) 440-9837
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