Specialty chemicals company Ferro Corp., which has been fighting a hostile takeover bid from A. Schulman Inc. of Fairlawn, has two new directors on its board.
Ferro shareholders on Wednesday approved all board-recommended items on its 2013 proxy statement.
“We’re pleased at this outcome,” Ferro spokeswoman Mary Abood said.
A dissident shareholders proxy contest seeking to elect three people to Ferro’s nine-person board was voted down — but that outcome was not totally unexpected. Ferro, headquartered in Mayfield Heights, earlier this month compromised with the dissidents.
Ferro agreed to let two of three director candidates, Jeffry N. Quinn and David A. Lorber, nominated by FrontFour Master Fund Ltd. and Quinpario Partners LLC, to run unopposed for the open positions on the nine-person board. Ferro ran one of its three original candidates, Ronald P. Vargo, for the third seat. Two other Ferro board members did not run for re-election.
Quinn is the chief executive officer of Quinpario while Lorber is the co-founder of FrontFour Capital Group.
“The company and the FrontFour-Quinpario group believe the resolution of the proxy contest is in the best interest of the company’s shareholders,” Ferro said in a May 9 letter sent to shareholders.
As part of the proxy contest agreement, Ferro said in a press release it agreed to form a committee “to evaluate strategies to enhance shareholder value including optimizing the company’s capital structure, reviewing strategic proposals, reviewing Ferro’s mix of businesses, and improving operating performance. The strategy committee will be comprised of five members, consisting of three directors designated by the company, as well as ... Quinn and Lorber.”
Ferro pushed back its annual shareholders meeting by a week after announcing the agreement with the dissident group.
The Ferro board is looking forward to working with the new directors and also to working on the company’s new “value creation strategy,” Abood said Wednesday.
Company executives earlier this year announced short- and long-term plans to improve the financial performance of Ferro, which has been struggling to turn a profit, while not mentioning Schulman’s purchase proposal.
Schulman made an unsolicited offer of $855 million in cash, stock and debt assumption to buy Ferro. Ferro’s board has opposed the measure.
Schulman CEO Joseph Gingo in April said he anticipated Ferro’s annual shareholders meeting would be the next key event in Schulman’s bid to buy the company. Gingo said he hoped a new slate of Ferro directors would at the very least engage Schulman in discussions.
Industry analysts have said Schulman likely will have to increase its offer from $6.50 a share to $7.50 to $9 a share to win over Ferro shareholders.
Buying Ferro, which reported revenue of $1.8 billion in 2012, would about double the size of $2.1 billion A. Schulman.
Ferro in late April reported it earned $883,000 on revenue of $418 million for its first quarter.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.