PR Newswire
NEW YORK, May 14, 2020
NEW YORK, May 14, 2020 /PRNewswire/ -- Wynnefield Capital, Inc. (together with its affiliates, "Wynnefield" or Wynnefield Capital), beneficial owners of approximately 8.5% of the outstanding common stock of MVC Capital Inc. (NYSE: MVC) ("MVC" or the "Company") today announced that its good faith attempt to reach a settlement with MVC is teetering, due to the chicanery of the Company's long-standing Chairman, Mike Tokarz.
By way of background:
Nelson Obus, President of Wynnefield Capital, said:
"We have no idea what has gotten into Mike Tokarz as of late. He had been an affable, responsive person, but has refused to speak with his second largest shareholder for nearly five months and most recently sent a surrogate to offer me greenmail. Since its founding twenty-seven years ago, Wynnefield Capital has supported the best interests of outside stockholders and advocated for sound governance practices. We would never consider taking greenmail and are deeply insulted by Mike's actions.
"We thought we were close to an amicable settlement with MVC and made a very practical request. We are taken aback by Mike's refusal to simply refrain from entering the Company into a transaction prior to the Annual Meeting, without first receiving majority approval from the independent directors.
"As responsible investors we must shine a bright light on any potential motivation to circumvent the will of MVC's stockholders – whether that be blocking a serious expression of interest from a third party or by entering into a self-serving, entrenching transaction not requiring stockholder approval. Therefore, we are now insisting on the recusal of the two insider directors, should any merger proposal be put before the Board prior to the Annual Meeting to be held on July 15.
"Let's be frank here, if Mike didn't have something up his sleeve, he'd agree to our very reasonable request. We gave Mike the benefit of the doubt when he insisted on pushing the Annual Meeting out into mid-July, but 'something is rotten in Purchase, NY.'
"To the detriment of all stockholders, MVC's long-tenured directors, particularly Chairman Tokarz, have demonstrated an inability to effectively guide the Company, resulting in deep discounts between NAV and share price, poor investment decisions, decreasing market capitalization and lackluster stockholder returns as compared to peers.1 Likewise, they have presided over a company whose corporate governance standards have deteriorated.
"In the absence of a settlement that protects all stockholders, we will move ahead on the nomination of three independent director candidates with the requisite financial and public company expertise to reposition MVC for success, with an eye towards returning capital to stockholders. If elected, our candidates will instill much-needed accountability, energy and fresh perspective to the Board, exercising their fiduciary duties and acting in the best interests of all stockholders. It is certainly time for change, as all the stockholders of MVC deserve a full Board that is capable of delivering value through sound business judgment.
"Specifically, we will look to unseat Chairman Mike Tokarz, Emilio Dominianni and Gerald Hellerman, among MVC's nine person Board. We will encourage Warren Holtsberg to remain on the Board so that he may represent MVC's management company."
Wynnefield Capital's director nominees are:
Ron Avni (44)
John D. Chapman (age 64)
Arthur D. Lipson (77)
Additional biographical information regarding Wynnefield Capital's director nominees are included in Wynnefield Capital's amended Statements of Beneficial Ownership on Schedule 13D previously filed with the SEC.
Kane Kessler, P.C. is providing legal counsel to Wynnefield Capital.
About Wynnefield Capital, Inc.
Established in 1992, Wynnefield Capital, Inc. is a value investor specializing in U.S. small cap situations that have company or industry specific catalysts.
Additional Information and Where to Find It
Wynnefield Partners Small Cap Value, L.P.; Wynnefield Partners Small Cap Value, L.P. I; Wynnefield Small Cap Value Offshore Fund, Ltd.; Wynnefield Capital, Inc. Profit Sharing & Money Purchase Plan; Wynnefield Capital Management, LLC; Wynnefield Capital, Inc.; Joshua H. Landes; and Nelson Obus (collectively, "Wynnefield Capital") together with John D. Chapman, Ron Avni and Arthur D. Lipson are participants in the solicitation of proxies from stockholders in connection with the 2020 Annual Meeting of Stockholders (the "Annual Meeting") of MVC Capital, Inc. (the "Company"). Wynnefield Capital intends to file a proxy statement (the "2020 Proxy Statement") with the Securities and Exchange Commission (the "SEC") in connection with the solicitation of proxies for the Annual Meeting unless it withdraws its nominations and/or proposal.
Wynnefield Capital may be deemed to beneficially own 1,514,379 shares of the Company's common stock, representing approximately 8.5% of the Company's outstanding common stock. Other than Mr. Lipson, who may be deemed to beneficially own 202,123 shares of the Company's common stock, representing approximately 1.1% of the Company's outstanding common stock, none of the other participants own any shares of the Company's common stock. Additional information regarding such participants, including their direct or indirect interests, by security holdings or otherwise, will be included in the 2020 Proxy Statement and other relevant documents to be filed with the SEC in connection with the Annual Meeting.
Promptly after any filing of its definitive 2020 Proxy Statement with the SEC, Wynnefield Capital intends to mail the definitive 2020 Proxy Statement and an accompanying proxy card to some or all stockholders pursuant to applicable SEC rules. STOCKHOLDERS ARE URGED TO READ THE 2020 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain, free of charge, copies of the definitive 2020 Proxy Statement and any other documents filed by Wynnefield Capital with respect to the Company with the SEC in connection with the Annual Meeting at the SEC's website (http://www.sec.gov).
Media Contact:
Daniel Yunger / Mark Semer
Kekst CNC
212.521.4800
[email protected] / [email protected]
Proxy Solicitor:
Saratoga Proxy Consulting
John Ferguson / Joe Mills
212.257.1311
[email protected]
1 Since November 2003, MVC's total shareholder returns, including dividends, have underperformed the S&P 500 Index by a staggering 154.69% (205.89% over the past ten years, 29.50% over the past five years, 8.72 over the past three years and 6.79% over the last year). Performance measured through close of trading on February 28, 2020. |
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SOURCE Wynnefield Capital
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