The activist hedge fund Clinton Group stepped up the pressure on ValueVision Media on Monday, threatening to take legal action if the board does not comply with its demands to call a special shareholder meeting.
It is the latest in a back-and-forth between the company’s management and the hedge fund, the Clinton Group said in a letter on Monday that it would seek to oust the board and take control of ValueVision.
ValueVision, which is based in Eden Prairie, Minn., sells jewelry, watches and appliances on television and through the Internet. It has been put under pressure by the activist investor after several years of lackluster performance.
On Nov. 4 the fund announced it had joined forces with another hedge fund, Cannell Capital, and threatened to mount a proxy war. Together the two have a more than 10 percent stake in the company, which entitles them to call a special meeting with shareholders to vote.
But in a response last Friday, the company rebuffed the Clinton Group’s demands and said that the hedge fund had no legal basis to call a special meeting under Minnesota corporate law.
In the letter, obtained by DealBook, the Clinton Group accuses Randy S. Ronning, the chairman of ValueVision, of attempting to prolong his tenure by postponing a special meeting for shareholders to vote on the hedge fund’s proposal.
“Our lawyers will be in touch on this technical point and, if you so demand, we will have it adjudicated by a court,†the letter says. ValueVision did not immediately respond to the letter.
Clinton Group has called for Keith R. Stewart, ValueVision’s chief executive, and Mr. Ronning, to step down. It has also proposed a list of candidates to replace five board members, including Thomas D. Mottola, former chairman and chief executive of Sony Music Entertainment and Thomas D. Beers, the chief executive of Fremantle Media, which produces “American Idol.â€
The company last week announced its own special meeting in March 2014. It also said it had created a special committee to oversee a candidate evaluation process for new board members. It has hired Jefferies as its financial adviser, while Simpson Thacher & Bartlett and Barnes & Thornburg are acting as legal advisers. The company has also hired Heidrick & Struggles, the executive search firm, to help it recruit candidates.
The latest letter urges the company to “call off the law firms, publicists, proxy solicitors, investor relations professionals and executive recruiters (and all their unavailing and flimsy delay tactics) and do the right thing as a fiduciary: Put in place the strong board we have recruited.â€
Shares in ValueVision fell 1.1 percent to close at $5.23 on Friday.
