BOSTON (Reuters) – Tegna (TGNA.N) shareholders re-elected all 12 directors to the U.S. regional TV station operator’s board, handing victory to management and ending a months-long proxy contest with hedge fund Standard General, which had sought to replace four board members.
Preliminary vote counts showed that all 12 directors were re-elected, the company said in a statement on Thursday.
“We are pleased by the support TEGNA shareholders have shown for our proven strategy to deliver growth and shareholder value,” Tegna’s president and chief executive officer Dave Lougee said in the statement.
Tegna’s stock price fell 5.20% to $10.76.
The outcome is a blow to Standard General, Tegna’s largest shareholder with a 12% stake, and its founder, Soohyung Kim, who had sought a seat for himself and three others.
Kim pushed for the company to sell itself and argued change is needed at the board to ensure the company fully explores a sale as well as more acquisitions in its industry.
During the meeting, held online, Kim said he respected the vote and plans to stay involved. Later the hedge fund said in a statement that the proxy fight has benefited shareholders by “challenging management’s narrative about the Company’s performance and seeking greater transparency about Tegna’s numbers, acquisition metrics, and engagement with third parties.”
The proxy contest was one of the season’s most hotly contested and a rare fight that went to a vote while other companies and activists settled differences quickly during the coronavirus outbreak.
Influential proxy advisers issued differing recommendations in the last weeks. Glass Lewis backed management, arguing that Kim lacked specific ideas to optimize Tegna’s performance.
Institutional Shareholder Services Inc (ISS) recommended shareholders elect one of the activist’s four nominees but did not endorse Kim. The personal attacks, it said, could spill into more boardroom dysfunction at a time management needs to focus on a financial and health crisis.
The battle reached a high on Tuesday when the hedge fund took the unusual step of suing strategy firm Tusk Strategies and 10 unidentified defendants in federal court. The lawsuit alleges Tusk and the others tried to manipulate the proxy contest by sending false and misleading materials to the media that falsely accused Kim of having engaged in criminal insider trading. Tusk Strategies did not respond to a request for comment.
Standard General is Tegna’s biggest shareholder followed by index funds Vanguard, BlackRock, and State Street.
Reporting by Svea Herbst-Bayliss; with additional reporting by Greg Roumeliotis and Krystal Hu; editing by David Evans, Steve Orlofsky and Jonathan Oatis