Egan Jones Recommends FOR Both Harbert
Discovery Fund Nominees
ISS, Glass Lewis and Egan Jones Have Now All
Recommended Shareholders Vote on HDF’s BLUE Card
Leading Independent Advisory Firms Have
Unanimously Supported the Case for Change Laid out by HDF and
Highlighted Enzo’s String of Broken Promises
Egan Jones Highlights that Enzo has had
Sufficient Time to Break the “Status Quo of Financial Failure” But
Has “Engaged in Misconstrued Decisions”
HDF Urges Enzo Shareholders to Vote FOR HDF’s
Highly-Qualified Independent Nominees Fabian Blank and Peter
Clemens on the BLUE Proxy Card Today
Harbert Discovery Fund, LP and Harbert Discovery Co-Investment
Fund I, LP (collectively “HDF”), the beneficial owners of more than
11.8% of the outstanding shares of Enzo Biochem, Inc. (NYSE: ENZ)
(“Enzo” or the “Company”), today announced that Egan-Jones Proxy
Services (“Egan-Jones”) has recommended shareholders vote for both
HDF nominees on the Blue proxy card. All three leading proxy
advisors – Egan-Jones, Glass, Lewis and Co. (“Glass Lewis”) and
Institutional Shareholder Services Inc. (“ISS”) – have now
supported HDF’s case for change at Enzo.
In its report, Egan-Jones highlights the need for change at the
Company, its track record of underperformance and corporate
governance issues, as well as the qualifications of HDF’s
nominees1:
- “We believe that voting FOR the Harbert nominees is in the best
interest of the Company and its shareholders.”
- “We believe that there is a validated need for change, as
evidenced by the Company’s financial and
operational underperformance, which have translated to value
destruction for the past years.”
- “In our view, the shareholders have given the Company a
considerable time to break the status quo of
financial failure, however, the Board and management have
engaged in misconstrued decisions, leading to
broken promises to fix the Company’s current state.”
- “We believe that there is a compelling need to alter the
Company’s corporate governance structure and practices in order to
protect the interests of the shareholders in
the future.”
- “We believe that the addition of the Harbert nominees will
endow the Board not only with the right mix
of skills, qualifications and experience, but will also bring
forward fresh perspectives to execute the appropriate
strategy to unlock and maximize shareholder value.”
- “Given the slate of nominees, the
nominees appear qualified, and we recommend that clients
vote FOR the nominees on the BLUE proxy
card.”
Previously, ISS also recommended voting on HDF’s card,
stating:
- “The dissident has made a compelling case
that board change is warranted, as evidenced by operational
deterioration, prolonged absolute and relative TSR
underperformance, and substandard corporate governance.”
- “ENZ has a history of broken
promises, as evidenced by the AmpiProbe development
history.”
- “There are also board independence
concerns, including the combined CEO/chairman role, the fact
that 40 percent of the board is non-independent, and the family and
professional relationships between Rabbani, Weiner, and
Hanna.”
Glass Lewis found numerous reasons for urgent concern regarding
the future of Enzo in its recommendation for both HDF nominees:
- “[W]e are ultimately inclined to conclude Harbert…submits the much stronger fundamental case.”
- “Disconcertingly, investors hoping to see a bold response
steeped in critical measures of operational progress have instead
been greeted by what we consider to be a fairly loosely structured narrative functionally ripped
from Enzo's last battle, including rehashed promises of pending value
generation.”
- “On balance, we consider the yield on our review is
fairly straightforward…the Company
has underperformed every benchmark over every
period, in all cases by no less than roughly 32%.”
- “[T]here remain a raft of other governance factors that we
consider reflect poorly on Enzo and the board's general willingness
to undertake proactive -- as opposed to
reactive -- change.”
Kenan Lucas, Managing Director and Portfolio Manager of HDF,
commented on the news, stating: “We believe that unanimous
recommendations for change from all three proxy advisory firms
sends a clear message: the status quo is no longer acceptable at
Enzo and fresh, independent voices are needed in the boardroom. Our
nominees, Fabian Blank and Peter Clemens, have the right experience
and skillsets to help Enzo become more than a story of broken
promises, and to end the prolonged history of underperformance. We
encourage any shareholder who cares about the future of their
investment to vote today for both of HDF’s nominees.”
Please visit our website at www.cureenzo.com to learn more.
Important Information about Participants in a Proxy
Solicitation:
Harbert Discovery Fund, LP (“Harbert Discovery”), Harbert
Discovery Fund GP, LLC (“Harbert Discovery GP”), Harbert Discovery
Co-Investment Fund I, LP (“Harbert Discovery Co-Investment” and
together with Harbert Discovery, the “Discovery Funds”), Harbert
Discovery Co-Investment Fund I GP, LLC (“Harbert Discovery
Co-Investment GP”), Harbert Fund Advisors, Inc. (“HFA”), Harbert
Management Corporation (“HMC”), Jack Bryant (“Mr. Bryant”), Raymond
Harbert (“Mr. Harbert”) and Kenan Lucas (“Mr. Lucas” and together
with Harbert Discovery, Harbert Discovery GP, Harbert Discovery
Co-Investment, Harbert Discovery Co-Investment GP, HFA, HMC and
Messrs. Bryant and Harbert, the “Harbert Discovery Parties”)
(collectively, the “Participants”) have filed with the Securities
and Exchange Commission (the “SEC”) a definitive proxy statement
and accompanying form of proxy to be used in connection with the
solicitation of proxies from the shareholders of Enzo Biochem, Inc.
(the “Company”) in connection with the annual meeting of
shareholders of the Company (the “Annual Meeting”). All
shareholders of the Company are advised to read the definitive
proxy statement and other documents related to the solicitation of
proxies by the Participants in respect of the Annual Meeting, as
they contain important information, including additional
information related to the Participants, their nominees for
election to the board of directors of the Company and the Annual
Meeting. The definitive proxy statement and an accompanying proxy
card will be furnished to some or all of the Company’s shareholders
and are, along with other relevant documents, available at no
charge on the SEC website at http://www.sec.gov/ and are available
upon request from the Participants’ proxy solicitor, Okapi
Partners, by calling (888) 758-6707 (banks and brokers call collect
(212) 297-0720).
Additional information about the Participants can be found on
the Definitive Proxy Statement filed by the Participants on
December 6, 2019.
About Harbert Discovery Fund (HDF)
HDF invests in a concentrated portfolio of publicly traded small
capitalization companies in the US and Canada. We perform
significant due diligence on each portfolio company prior to
investing. In addition to researching all publicly available
information and meeting with management, our diligence includes
substantial primary research with industry experts, consultants,
bankers, customers and competitors. We often spend months or years
researching ideas before making an investment decision and we only
invest in companies that we believe are significantly undervalued,
and where there is the potential for change to enhance or
accelerate value creation. In an effort to unlock this potential
value, we seek to work directly with the boards and management
teams of our portfolio companies privately and collaboratively,
engaging with them on a range of factors including governance,
board composition, corporate strategy, capital allocation,
strategic alternatives and operations. We have effected positive,
fundamental changes at our current and past investments through
this behind-the-scenes, constructive approach. HDF currently has
board representation at three of our portfolio companies. In each
case, changes to the board were agreed upon privately and it is our
strong preference in every investment to avoid the unnecessary
distractions and costs of a public proxy campaign.
About Harbert Management Corporation (HMC)
HMC is an alternative asset management firm with approximately
$7.0 billion in regulatory assets under management as of December
31, 2019. HMC currently sponsors nine distinct investment
strategies with dedicated investment teams. Additional information
about HMC can be found at www.harbert.net.
1 Permission to quote third parties neither sought nor obtained.
Emphasis added.
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version on businesswire.com: https://www.businesswire.com/news/home/20200121005999/en/
Investor Contact Okapi Partners LLC Bruce Goldfarb /
Chuck Garske / Jason Alexander, 212-297-0720
info@okapipartners.com
Media Contact Sloane & Company Dan Zacchei / Sarah
Braunstein, 212-486-9500 dzacchei@sloanepr.com /
sbraunstein@sloanepr.com
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