PLYMOUTH — An investor in Rofin-Sinar Technologies Inc. (Nasdaq:
RSTI), the industrial laser maker with headquarters in Plymouth and
Hamburg, Germany, has nominated three candidates for the company’s board, and a proxy fight is shaping up at the next shareholder meeting.
The company says the investor, SilverArrow Capital Advisor LLP, has also rejected a settlement offer from current management that would have included one board seat.
Rofin-Sinar chairman Peter Wirth said in a statement: “We are highly disappointed by SilverArrow’s decision to pursue its short-term interests through a self-serving proxy fight to the detriment of ROFIN and its other stockholders. We have engaged in good faith discussions with SilverArrow to reach a settlement and offered to appoint one of SilverArrow’s director candidates. Our independent Nominating Committee has conducted a thorough evaluation of all three of SilverArrow’s candidates: Mr. Gebhard Rainer, Mr. Jordan Kovler and Mr. Thomas Limberger. The Nominating Committee believes only one candidate, Mr. Rainer, could be an effective contributor to the Board. The other candidates were determined to be unsuitable for a number of reasons, including in the case of Mr. Kovler, his lack of relevant business and board experience and, in the case of Mr. Limberger, his track record of stockholder value destruction in the two most recent public companies for which he served as CEO, and reported questionable business decisions and practices.”
Rofin-Sinar says its nominating committee, made up of independent
directors, reviewed the board candidates. In a press release, Rofin said Limberger “oversaw debt-fueled acquisition sprees that supported short-term financial targets but destroyed value over the longer term” and that his “leadership track record is also dogged by reports of misuse of company funds, high turnover of senior executives, excessive executive pay and a Swiss Stock Exchange investigation reportedly into his share dealings. Mr. Limberger did not provide professional references from his most recent prior employers, despite repeated requests from the Nominating Committee. Instead he provided contact details for his apparent step-father and the head of the German American Hall of Fame in New York City.”
As for Kovler, the company said, he “has no leadership or relevant
Board experience and no apparent industry knowledge. In fact, since
graduating college in 2001, Mr. Kovler’s only work experience has been in the fundraising department for two years at a small not-for-profit entity, and working for 12 years at the same proxy solicitation firm that is currently advising SilverArrow, until a few months ago.”
Rofin-Sinar also said Silver Arrow has made “a number of factually
incorrect statements about Rofin’s business, financial results and
operating performance” and “has proposed strategic initiatives that the company has already begun to implement earlier in 2015 or before, such as consolidating entities and sites and implementing lean manufacturing, or that have been analyzed but determined not to be in the best interests of stockholders, such as pursuing medical
applications in the near term, which would require an entirely new
manufacturing infrastructure, regulatory approvals and sales force.”
In its filings, Silver Arrow is seeking to eliminate staggered terms for board members, and allow holders of more than 15 percent of the company’s stock to call a special meeting of stockholders. Silver Arrow says the current board “has demonstrated a poor track record of overseeing the company’s performance,” including “a significant underperformance of the company’s stock over the past five year period,” “a deterioration of the company’s relative sales and market share,” “a history of weak relative operational performance” and “corporate governance that has been compromised in favor of the interests of sitting board members.” It says RSTI stock has underperformed by the Nasdaq composite and IT indices since 2010.
The date of the 2016 shareholder meeting has not yet been set.
Rofin-Sinar stock hit a new 52-week low of $22.01 a share on Jan. 11. As of Thursday at 11 a.m., it was at $23.53 a share, up 55 cents or 2.4 percent on the day. Its 52-week high is $30.41 a share.
The company named a new president and CEO, Thomas Merk, in July, succeeding Gunther Braun, who had been president and CEO since 2005. Rofin-Sinar last reported earnings Nov. 12, posting $142 million in revenue in the third quarter, beating analyst estimates of $137 million, and earnings of 52 cents a share, beating analyst estimates of 50 cents a share.