Enzo Has Acted Out of Desperation to Undermine
the Will of its Shareholders
Wasteful and Bizarre Tactics Only Reinforce the
Need for a Radical Cultural Change in Enzo’s Boardroom
Harbert Intends to Pursue All Available Options
to Ensure the Voices of All Shareholders Can be Heard at Enzo
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 issued the following statement
commenting on Enzo’s January 28, 2020 press release announcing the
postponement of its 2019 Annual Meeting of Shareholders (the
“Annual Meeting”) to February 25, 2020 and proposing the potential
expansion of its Board of Directors (the “Board”) to seven seats
from the current five.
“We are disappointed – but not surprised – that the Company has
taken this desperate action, which is nothing more than a
transparent attempt to undermine the will of Enzo’s shareholders.
As the Company knew, at the time of the Company’s announcement, HDF
held proxies totaling over a majority of the outstanding shares in
support of HDF nominee Fabian Blank, and more than a majority of
the shares of any recent quorum in support of HDF nominee Peter
Clemens, IV.1
Enzo’s attempt to claim some kind of credit for “no longer
opposing” our nominees is ludicrous. Shareholders deserve
better.
What is especially unfortunate is how wasteful and unnecessary
the Company’s entrenchment maneuvers are.
We have always been open to finding a constructive and mutually
agreeable solution with Enzo. When the Company proposed a
settlement structure for the first time to us on January 22nd, it
suggested that none of its directors step off the Board – even
after all three leading proxy advisory firms supported the case for
change. Nonetheless, we engaged with them and quickly submitted a
counteroffer. However, three days later, on Saturday, January 25th,
Enzo’s counsel rejected this and told us that they would not
negotiate and would not budge from their initial position. Then
yesterday Enzo stated in its own press release, “According to Enzo,
the Company has attempted to reach an amicable resolution with
Harbert…” This is not only nonsensical, it is simply
disingenuous.
We strongly believe that it is not in the best interests of
anyone – especially Enzo’s shareholders – to have to incur the
additional costs associated with a delayed Annual Meeting and an
expanded Board. Further, to enlarge the Board to seven directors
would be completely out of line with what is necessary for a
company of this size. It is ridiculous that Enzo’s directors have
steered the Company down a pathway that would waste so much of
shareholders’ money simply because they do not want to accept the
outcome of a fair shareholder election. Ultimately, these actions
are simply further evidence that Board refreshment is desperately
needed at Enzo.
We will continue to pursue all available options, including
potential legal recourse, to ensure that shareholders ultimately
have the opportunity to have their voices heard at Enzo.
Shareholders who already voted on the BLUE proxy card will still
have their votes counted at the Annual Meeting. However, we will be
filing an updated BLUE proxy card following the Company’s filing of
its revised proxy statement so that investors can express a
preference on the Company’s proposal to expand the size of the
board. We look forward to providing a further update to our fellow
shareholders soon.”
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 This tabulation is based solely on the BLUE proxy cards
received by Harbert’s proxy solicitor through the afternoon of
January 28, 2020. This tabulation does not reflect the final
results of the Annual Meeting. At any point at or prior to the
Annual Meeting, shareholders can change their vote, revoke their
proxy or vote on the Company’s proxy card. The final results of the
proxy solicitation will not be known until the Annual Meeting is
held.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200129005565/en/
Investor Contact Okapi Partners LLC Bruce Goldfarb /
Chuck Garske / Jason Alexander, 212-297-0720
info@okapipartners.com
Media Contact Sloane & Company Dan Zacchei / Joe
Germani, 212-486-9500 dzacchei@sloanepr.com /
jgermani@sloanepr.com
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