Hedge Funds Plan Proxy Battle for Shopping Network ValueVision Media

Two activist hedge funds, Clinton Group and Cannell Capital, have joined forces to mount a proxy battle for control of the internet and television shopping network ValueVision Media.

Clinton Group, which manages $1.5 billion in assets, began publicly agitating for change last week, calling for the company’s chief executive and some of its board members to step down.

It plans to announce later on Monday that it has filed a request demanding a special meeting for shareholders, according to a person briefed on the firm’s plans.

The hedge fund is expected to propose a list of board candidates that includes Thomas D. Mottola, the former chairman and chief executive of Sony Music Entertainment, and Thomas D. Beers, the chief executive of FremantleMedia, the producer of “American Idol” and “The X Factor.”

ValueVision, which sells jewelry, watches and appliances, has lagged behind its peers the Home Shopping Network and QVC, despite similar distribution numbers. ValueVision’s network reaches more than 86 million satellite and cable homes, while HSN reaches 95 million.

Clinton Group wants Keith Stewart, the chief executive officer, to relinquish his position, contending that under his leadership the company has consistently missed its targets and has fallen further behind its rivals in terms of revenue and market capitalization.

In a letter addressed to ValueVision’s chairman Randy S. Ronning last week, Clinton Group’s president, Gregory P. Taxin, said the company “has great assets, a big opportunity for growth and a chance to create significant shareholder growth.”

The hedge fund met with ValueVision’s chairman, Randy S. Ronning, and Sean Orr, an independent director, in September, and exchanged phone calls, according to the letter.

In response, the company said last week that it would “take the time necessary to thoroughly evaluate the Clinton letter,” but added that it supported the current management.

Clinton Group is expected to call for Mr. Ronning to step down along with five of the seven current board members. It will also propose expanding the board to nine members and has a list of candidates including a former chief executive at rival HSN.

Collectively, Clinton Group and Cannell Capital have a 10 percent stake, which entitles them to call for a vote with shareholders.

ValueVision’s share price closed at $5.21 on Friday and has fallen 3.9 percent since Clinton Group publicly disclosed its interest in the company.