Bradley L. Radoff Issues Open Letter to Recently-Appointed Independent Directors of Enzo Biochem
October 19 2021 - 7:00AM
Business Wire
Asserts the Company’s Chief Executive
Officer Succession Plan Further Entrenches Dr. Elazar Rabbani, who
Will Continue Serving as Chairman and Chief Scientific Officer,
Despite Unprecedented Shareholder Opposition and Unrest
Calls on the Board to Take Swift Action to
Reduce Dr. Rabbani’s Inappropriate and Outsized Influence Over the
Company
Encourages the Board to Finally Provide
Shareholders a Transparent Update on the Company’s Months-Long
Strategic Review
Urges the Board to Pursue a Negotiated
Resolution with Shareholders who have Nominated Director Candidates
– Not Force Another Unnecessary Election Contest
Bradley L. Radoff, who together with his affiliates holds
approximately 7.2% of the outstanding common shares of Enzo
Biochem, Inc. (NYSE: ENZ) ("Enzo" or the "Company"), today issued
the following open letter to Dr. Mary Tagliaferri and Dr. Ian B.
Walters, who joined the Company’s Board of Directors (the “Board”)
in November 2020:
Dr. Tagliaferri and Dr. Walters,
As you likely know, I am one of Enzo’s largest shareholders and
have recently nominated two highly-qualified, independent
individuals for election to the Company’s Board at the 2021 Annual
Meeting of Shareholders. I am also one of the many shareholders
with significant concerns pertaining to Enzo’s imperial leadership,
poor corporate governance and seven-month-long strategic review.
These concerns have only grown on the heels of the Company
announcing its Chief Executive Officer succession plan, which
appears to have been structured to prolong the 45-year reign of Dr.
Elazar Rabbani, who is slated to continue serving as Chairman and
step into the new role of Chief Scientific Officer. It seems the
Board is either completely beholden to Dr. Rabbani or utterly
oblivious to the unprecedented shareholder opposition to his
continued service as a director or officer.
Although I wanted to avoid public discord and maintain a
productive private dialogue with Enzo’s leadership, the Board has
been uninterested in any substantive engagement with me to date. It
is now clear to me that this is due to Dr. Rabbani still holding an
inappropriate and outsized level of corporate power. The prospect
of Dr. Rabbani perpetually running roughshod over his fellow
directors and a new Chief Executive Officer is particularly
disturbing when considering his record of undermining shareholder
democracy and presiding over sustained value destruction – not to
mention the fact that he somehow remains Chairman despite
shareholders voting him off of the Board at the 2020 Annual Meeting
of Shareholders.
While I recognize you are not responsible for Enzo’s many years
of dysfunction and stagnation under Dr. Rabbani, please recognize
that shareholders are now counting on you to champion their best
interests. We need you to be change agents in the boardroom, not
rubberstamped votes for Dr. Rabbani. I urge you to consider the
following in the days and weeks ahead:
- The Board needs to take swift action to prevent Dr. Rabbani
from perpetually controlling the Company, as if it is his own
private fiefdom. The announced succession plan, which does not
account for the new Chief Executive Officer joining the Board and
does not set a retirement date for Dr. Rabbani, represents the type
of governance failure that truly independent directors should want
to quickly rectify. In my view, the fact that Enzo’s shares
declined more than 12% following yesterday’s announcement verifies
shareholders are adamantly opposed to any extended tenure for Dr.
Rabbani. Dr. Rabbani has had 45 years to deliver value for Enzo's
stakeholders, with no success – it is time for fresh perspectives
and aligned interests to enter the boardroom and lead from the top.
I call on the Board to appoint a new and independent Chairman and
provide shareholders an assurance that Dr. Rabbani will leave the
Company in the near-term.
- The Board needs to transparently update shareholders on its
months-long strategic review. I cannot recall a more
poorly-communicated and opaque strategic review in all my years of
investing in the public markets. In light of the fact that the
Board retained Cain Brothers in March, it is unacceptable that
there was no meaningful update on the review during last week’s
earnings presentation. Additionally, there was zero mention of the
review process in yesterday's CEO succession plan announcement.
This apparent lack of urgency and sparse communication leads me –
and presumably many other shareholders – to fear that the Board is
either unable or unwilling to legitimately pursue value-enhancing
alternatives. Yesterday’s announcement has only compounded my
fears.
- The Board should pursue a negotiated resolution with
shareholders who have nominated director candidates, rather than
force another costly contested election. Enzo’s shareholder
base includes a growing chorus of aggrieved investors, including an
astounding four 13D filers. I have also received unsolicited
feedback from a number of sizable shareholders who believe
boardroom change is urgently needed. Unless the Board is completely
tone deaf, it should be able to conclude that a
consensually-negotiated director refresh is the best path forward.
The only winners in a prospective proxy fight this year will be
Enzo’s army of advisors, who have presumably received millions of
dollars in fees in recent years as the Company dramatically
underperformed the market, relevant indices and peers. Please note
that I stand ready and willing to negotiate a good faith settlement
that benefits all shareholders and stakeholders. My nominees, whose
biographies are included as an appendix to this letter, can bring
very additive perspectives to Enzo and help reset the balance of
power in the boardroom.
Hopefully it is clear that I want to avert an election contest.
However, if my hand is forced by the Board, rest assured that I
will devote the capital, energy and resources needed to run an
effective campaign for change. I will not be deterred by the type
of anti-shareholder maneuvers and litigation strategies that Dr.
Rabbani has historically utilized to insulate himself.
Both of you are credentialed and respected leaders in the
biotechnology and healthcare industries. You have experience
working at effectively-governed public companies that pursue value
for all constituencies, ranging from patients and providers to
employees and shareholders. You know what success looks like.
Enzo’s shareholders, including myself, want to believe that you
also know that your fiduciary duties are owed to us, not Dr.
Rabbani.
Thank you for considering the important points laid out in this
communication. I am prepared to constructively engage with you and
any other member of the Board willing to embrace shareholder
feedback. I look forward to working together to finally usher in a
new day at Enzo.
Sincerely, Bradley L. Radoff
THE RADOFF NOMINEES
- Bradley L. Radoff is a successful investor and proven
public company director with significant experience in the areas of
corporate governance, capital allocation, operational turnarounds
and strategic reviews. Mr. Radoff has held roles at some of the
world’s top asset management firms and financial institutions,
including Citadel and Third Point, where he held a senior-level
position. He currently serves on the Board of VAALCO Energy, Inc.
(NYSE: EGY), a Texas-based independent energy company and Harte
Hanks, Inc. (OTCQX: HRTH), a leading global customer experience
company. Mr. Radoff previously served as a director of Support.com,
Inc. (NASDAQ: SPRT), a leading provider of cloud-based software and
services, from June 2016 until its merger in September 2021, and
Pogo Producing Company (formerly NYSE: PPP), a major oil and
natural gas company, from March 2007 to November 2007 prior to its
sale to Plains Exploration for $3.6 billion. Mr. Radoff graduated
summa cum laude with a B.A. in Economics from The Wharton School at
the University of Pennsylvania. If appointed or elected to the
Board, Mr. Radoff would bring a sorely-needed shareholder
perspective and a vision for enhancing the Company’s lagging
corporate governance.
- Lorrie A. Carr is a high-integrity leader in the
biopharmaceutical and specialty pharmacy sectors, with valuable
experience serving as a chief executive and director of several
organizations. Ms. Carr most recently served as the Chief Executive
Officer and a director of Avita, a national pharmacy services
organization, from June 2019 to May 2021. Prior to that, Ms. Carr
served as the Chief Executive Officer and a director of ExceleraRx
Corp., a healthcare company that empowers integrated delivery
networks, health systems and academic medical centers to provide
personalized, integrated care for patients, from July 2018 to July
2019. Earlier in her career, Ms. Carr served as the Divisional Vice
President of Enterprise Specialty Sales and Product Management at
Walgreens Specialty Pharmacy, a division of Walgreen Co. and now
part of Walgreens Boots Alliance, Inc. (NASDAQ: WBA). Ms. Carr
earned her M.B.A. from the University of Massachusetts, Isenberg
School of Management and B.A. in Business Administration from
Columbia College. If appointed or elected to the Board, Ms. Carr
would bring valuable experience in the areas of corporate
governance, regulatory affairs and strategic planning.
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Bradley L. Radoff, together with the other participants named
herein (collectively, the “Radoff Group”), intends to file a
preliminary proxy statement and accompanying WHITE proxy
card with the Securities and Exchange Commission (“SEC”) to be used
to solicit votes for the election of its slate of highly qualified
director nominees at the 2021 annual meeting of shareholders of
Enzo Biochem, Inc., a New York corporation (the “Company”).
THE RADOFF GROUP STRONGLY ADVISES ALL SHAREHOLDERS OF THE
COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON
THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
The participants in the proxy solicitation are anticipated to be
The Radoff Family Foundation, a Texas non-profit corporation
(“Radoff Foundation”), Bradley L. Radoff and Lorrie A. Carr.
As of the date hereof, Radoff Foundations directly beneficially
owns 400,000 shares of common stock, par value $0.01 per share, of
the Company (“Common Stock”). As of the date hereof, Mr. Radoff
directly beneficially owns 3,075,100 shares of Common Stock. Mr.
Radoff, as a director of Radoff Foundation, may be deemed to
beneficially own the 400,000 shares of Common Stock owned by Radoff
Foundation, which, together with the 3,075,100 shares of Common
Stock he directly owns, constitutes an aggregate of 3,475,100
shares of Common Stock beneficially owned by Mr. Radoff. As of the
date hereof, Ms. Carr does not beneficially own any shares of
Common Stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211019005368/en/
For Shareholders: Saratoga Proxy Consulting John Ferguson,
212-257-1311 jferguson@saratogaproxy.com For Media: MKA Charlotte
Kiaie / Bela Kirpalani, 646-386-0091 ckiaie@mkacomms.com /
bkirpalani@mkacomms.com
Enzo Biochem (NYSE:ENZ)
Historical Stock Chart
From Jun 2024 to Jul 2024
Enzo Biochem (NYSE:ENZ)
Historical Stock Chart
From Jul 2023 to Jul 2024