ISS and Glass Lewis Recommend Forte Biosciences Stockholders Vote FOR Boardroom Change at the Company’s Upcoming Annual Meeting
September 14 2023 - 10:50AM
Business Wire
Both Leading Independent Proxy Advisory
Firms Conclude Forte’s Poor Performance and Dilutive,
Anti-Stockholder Actions Under Chairman and CEO Dr. Paul Wagner’s
Leadership Indicate Boardroom Change is Urgently Needed
Glass Lewis Recommends Stockholders Vote
FOR the Group’s Director Candidates –
Michael Hacke and Chris McIntyre – Noting They Would Bring
Value-Additive Capital Allocation and Investment Experience to the
Company’s Board
Glass Lewis Acknowledges Forte’s “Entrenched
Board” is in Dire “Need of Fresh Perspectives,” Necessitating
Chairman and CEO Dr. Paul Wagner and Dr. Lawrence Eichenfield’s
Removal
Investors are Encouraged to Vote for Michael
Hacke and Chris McIntyre on the WHITE
Proxy Card Ahead of the Company’s Annual Meeting Scheduled for
September 19th
Camac Partners, LLC (“Camac”) and ATG Capital Management, LLC
(“ATG”) (together with the other participants in their
solicitation, the “Concerned Stockholders,” the “Group” or “we”),
which collectively own approximately 8.5% of the outstanding common
stock of Forte Biosciences, Inc. (Nasdaq: FBRX) (“Forte” or the
“Company”), today announced that leading independent proxy advisory
firms Institutional Shareholder Services Inc. (“ISS”) and Glass,
Lewis & Co., LLC (“Glass Lewis”) have recommended stockholders
support boardroom change at the Company’s upcoming Annual Meeting
of Stockholders (the “Annual Meeting”) scheduled for September 19,
2023.
The Group commented:
“We are pleased that both ISS and Glass Lewis have recognized
the need for change in Forte’s boardroom and share our grave
concerns with the dilutive, anti-stockholder actions taken by the
current Board. Under Chairman and CEO Dr. Paul Wagner’s leadership,
investors have been repeatedly diluted by capital raises and seen
the value of their investment decline by 95% since the Company’s
IPO. It is incredibly telling that during a period in which the
Board has faced such fierce, widespread rebuke from stockholders on
its governance practices, the Nominating and Corporate Governance
Committee did not have a single meeting. In its report, ISS
recognized that boardroom change is needed to curb actions that run
directly contrary to stockholders’ interests, while Glass Lewis
highlighted how our director candidates’ capital allocation and
investment expertise can be expected to bring value to the Board,
the Company and its stockholders moving forward. Ahead of the
upcoming Annual Meeting, we urge our fellow stockholders to vote
for both of our independent director candidates – Michael Hacke and
Chris McIntyre – who have the experience needed to address gaps in
the boardroom and help put Forte back on the right path. If
elected, both individuals intend to join the Company’s Board with
open minds, advocate for stockholders’ best interests and work with
the remaining directors to explore all paths to unlocking
stockholder value.”
In its report, Glass Lewis detailed why boardroom change is
warranted at Forte and why Messrs. Hacke and McIntyre are the right
change agents:1
- “Given the Company’s poor performance, track record of value
destructive actions and apparent attempts to entrench incumbent
leadership and undermine shareholder rights, we believe the
removal of both Management Nominees from the board is
warranted.”
- “Mr. Wagner, as chairman and CEO of the Company,
holds particular responsibility for the Company’s poor
performance and failure to address shareholder concerns […]
Forte’s financial performance has been extremely poor under the
tenures of the Management Nominees since the Company’s initial
public listing in 2020.”
- “[…] the board has taken numerous steps to entrench the
incumbent leadership and to diminish the rights of
shareholders […]”
- “We agree with the Dissident’s assessment that the Company’s
share issuances in mid-2022 and in July 2023 do not appear to have
served a clear business need and were dilutive and value
destructive for existing shareholders […] we are concerned they
appear to be part of an attempt to entrench the incumbent
leadership by diluting the interests of critical shareholders ahead
of the contested election.”
- “Given our views that the Company's shareholder rights plan
is not in the best interests of shareholders, we believe it
would be reasonable for shareholders to also support both of the
shareholder proposals (Proposals 6 and 7) [to amend the bylaws
so that shareholder rights plans are not effective unless ratified
by shareholders and to terminate the Company’s 2022 shareholder
rights agreement.]”
- “[…] the Dissident has nominated two candidates who appear to
have relevant qualifications that are currently lacking or
underrepresented on the Forte board […] The Dissident Nominees
would offer investment, capital markets and capital allocation
expertise that we expect could be of value to the board and to the
Company going forward.”
- “We are concerned that the nominating and corporate
governance committee did not meet during the last fiscal year
[…] Here we believe the chair has not performed that responsibility
to the satisfaction of shareholders.”
- “[…] there is sufficient cause for shareholder concern with
the Company’s current strategy to focus on the development of
FB-102, which is notably early stage, unproven and speculative,
in our view.”
- “[…] there is a strong argument to be made in favor of
seriously and credibly evaluating a potential liquidation or other
alternatives that might allow shareholders to realize [Forte’s]
value [...]”
In highlighting the concerning anti-stockholder actions taken by
the Board under Chairman and CEO Dr. Paul Wagner and Dr. Lawrence
Eichenfield’s leadership, ISS noted:2
- “At worst, the board sold shares at a discount to intrinsic
value so as to dilute the power of the dissident shareholders, with
all other pre-placement shareholders suffering collateral
damage.”
- “[…] the approach that the board took to engaging with the
dissident and the delay in the annual meeting is
troubling.”
- “[…] the failure to submit the [poison] pill to shareholders
for a vote, as well as the presence of a classified board structure
and supermajority voting requirement, is out of line with
governance best practices.”
- “Although the board had the option of engaging directly with
the dissident […] the board opted to have its outside counsel
negotiate in the board's place. This led to an interaction in which
counsel […] threatened that if shareholders voted the CEO off
the board, the remaining directors would expand the board and
re-appoint him.”
- “[…] board change is needed to tweak the way the company
provides information to shareholders and to curb actions
that […] appear to be contrary to shareholders’
interests.”
- “In consideration of the board’s ineffective pursuit […] of its
strategy, which came at substantial cost to shareholders […],
change is warranted to vet the recent financing decision,
improve the board’s responsiveness to shareholder priorities, and
enhance its approach to investor relations.”
- “The operational issues identified […] are indicative of a
need for better communication with
shareholders.”
- “Withholding support from Eichenfield appears to be the most
direct approach to achieve the change that is warranted.”
***
VOTE “FOR” THE CONCERNED STOCKHOLDERS’
HIGHLY QUALIFIED NOMINEES ON THE WHITE
PROXY CARD AHEAD OF FORTE’S ANNUAL MEETING ON SEPTEMBER 19,
2023.
ONLY YOUR LATEST DATED
VOTE COUNTS. IF YOU VOTED FOR THE COMPANY’S NOMINEES
PREVIOUSLY, A LATER DATED VOTE FOR THE CONCERNED STOCKHOLDERS’
NOMINEES WILL OVERRIDE YOUR PRIOR VOTING INSTRUCTIONS.
IF YOU HAVE ANY QUESTIONS REGARDING HOW TO
VOTE, PLEASE CALL SARATOGA PROXY CONSULTING AT (888) 368-0379 OR
(212) 257-1311 OR BY EMAIL AT INFO@SARATOGAPROXY.COM
***
About Camac
Camac is a private investment firm founded in 2011. Camac
focuses on extremely mispriced assets in discrete pockets of
opportunity. Camac prides itself on its unique sourcing, flexible
mandate, and constant focus on non-competitive opportunities. Its
investments are long term in nature and focused on compounding
capital over several decades rather than months or years.
About ATG
ATG is a privately-held investment firm that manages investment
vehicles for select accredited investors. Founded by Gabi
Gliksberg, ATG invests primarily in public equity markets,
utilizing alternative strategies and shareholder activism, in
pursuit of providing superior, long term investment returns. Visit
atgfund.com for more information.
_______________________________________________ 1 Permission to
quote Glass Lewis was neither sought nor obtained. Emphases added.
2 Permission to quote ISS was neither sought nor obtained. Emphases
added.
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version on businesswire.com: https://www.businesswire.com/news/home/20230913303096/en/
Saratoga Proxy Consulting LLC John Ferguson / Joe Mills,
212-257-1311 info@saratogaproxy.com
Longacre Square Partners Charlotte Kiaie / Ashley Areopagita,
646-386-0091 concernedFBRXstockholders@longacresquare.com
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