Board Should Pursue Strategic Alternatives Rather than Seek to Entrench Itself
OMAHA, Neb., May 18 /PRNewswire/ -- Vinod Gupta, the founder, member of the board of directors and holder of approximately 39% of the outstanding stock of InfoGroup (Nasdaq: IUSA) announced today that he strongly disagreed with the Company's recent decision to adopt a poison pill and believes that the Company must explore strategic alternatives.
"I believe that the Board of Directors' adoption of a 'poison pill' demonstrates that many of the directors are willing to entrench themselves at the expense of the Company's stockholders," said Mr. Gupta. "Unfortunately, this conduct is consistent with past Board actions. When I entered into a settlement agreement with the Company in 2008, the Board insisted that I vote all my shares in favor of the Board's nominees for director rather than proportionately with the shares of the Company's unaffiliated stockholders, as I had strongly demanded. The Board simply wanted to control my votes (approximately 39% of the Company's voting stock) to assure that they could keep their board seats rather than give the stockholders, to whom they should owe their allegiance, a meaningful say in the election of directors," Mr. Gupta stated.
"I regret that some members of this Board, who do not own a meaningful amount of stock in the Company like I do, seem much more interested in assuring that they retain their directorships than in doing what is best for the stockholders of the Company. I sincerely hope that all stockholders, as well as Risk Metrics, let these members of the Board know their displeasure with the Board's decision to adopt a rights plan," Mr. Gupta continued.
"It is bad enough that a majority of the Board would take this action against the best interests of all of the stockholders. However, in my case, their conduct amounts to a breach by the Board of an agreement between the Company and me, as described in the letter to the Board attached to this press release," said Mr. Gupta.
"Even the adoption of the poison pill might not be so bad in isolation. But the poison pill has to be judged against the background of the Company's dismal performance since new management was installed and other actions by a majority of the Board to feather the nest of directors and senior management. These include:
Mr. Gupta said.
"I strongly believe that it is in the best interests of the stockholders for the Board to explore the Company's strategic alternatives rather than for the Board to seek to entrench itself and waste money on the Board and the Company's top executives. In my capacity as a stockholder of the Company, I have been approached by both strategic and financial buyers about potential transactions but I believe the Company has failed to engage with them in any meaningful way. I remain open to a sale of the Company and would be willing to participate (or not participate) with the buyer if that helped get a transaction done," Mr. Gupta concluded.
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