NEW YORK, April 21, 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 the nomination of two
highly-qualified, independent candidates for election to MVC's nine
member Board of Directors at the Company's 2020 Annual Meeting of
Shareholders ("Annual Meeting").
Wynnefield was compelled to make these nominations due to four
primary reasons:
1. MVC's demonstrated inability to create sustained
shareholder value, as evidenced by continuous underperformance
versus prevailing indices, steep discounts to NAV and lackluster
dividends compared to peers. 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).1 In particular,
Wynnefield believes that MVC's failure to sell equity positions has
hampered the Company from achieving a yield in line with other
similar business development companies ("BDCs").
2. MVC's poor corporate governance, highlighted by
the ineffectiveness of a majority of the Board, who have presided
over the Company's unsuccessful investment decisions and dreary
performance spanning close to two decades. For instance,
Emilio Dominianni (88) has been a
director of MVC for 17 years and William
Taylor (77) has been a director for 14 years, yet both lack
relevant experience.
3. MVC's unwillingness to engage in meaningful dialogue
with Wynnefield Capital, its second largest shareholder,
towards high value enhancing, strategic alternatives that would be
in the best interests of the Company and its shareholders.
These strategic alternatives are further outlined in Wynnefield's
previously submitted shareholder proposal, which it also intends to
present at the Annual Meeting. The proposal requests that
MVC's stockholders adopt a resolution recommending that the Board
immediately take all necessary steps within its power to commence
the process of: (i) selling MVC to a strategic acquirer; (ii)
liquidating its portfolio and returning proceeds to shareholders;
or (iii) merging MVC with another BDC to achieve necessary scale,
paving the way for lower operating expenses and higher
dividends.
4. Independent perspective. The best interests
of the Company and its shareholders would be well served by
refreshing the Board with Wynnefield Capital's independent
nominees, John Chapman and
Ron Avni. Each bring deep
financial analysis and public company expertise. If elected,
Messrs. Chapman and Avni are committed to independently evaluating
the alternative strategies that Wynnefield previously recommended
to MVC's Board on January 17, 2020,
and to working collaboratively with their Board colleagues.
Nelson Obus, President of
Wynnefield Capital, said, "As a significant and long-term
shareholder, we are alarmed that most of MVC's long-tenured Board
members are, by all accounts, unwilling to act in the best
interests of the Company. These long-tenured directors, 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 shareholder returns as compared to peers.
Likewise, they have presided over a company whose corporate
governance standards are antiquated, at best."
Mr. Obus continued, "We have, therefore, decided to nominate
director candidates with the requisite financial and public company
expertise to reposition MVC for success, with an eye towards
returning capital to shareholders. If elected, our candidates
will instill much-needed accountability, energy and fresh
perspective to the Board. It is certainly time for change, as
all the shareholders of MVC deserve a full Board that is capable of
delivering shareholder value through sound business judgment."
Wynnefield Capital's director nominees are:
John D. Chapman (age
64)
- Specializes in representing shareholder interests in
connection with the operation and management of investment funds
and ancillary assets.
- Unique skillset, insights and qualifications to serve as a
member of MVC's Board and any of its committees.
- Extensive legal, financial analysis and corporate
governance expertise.
- Served as the chairman, executive director, or
non-executive director of a number of public companies, both
domestically and globally.
- CFA® Charterholder and member of the New York State Bar Association. Received a
B.A. from Bates College and a Juris
Doctorate from The University of
Texas.
Ron Avni (44)
- 20 years of extensive financial, operational and investment
management experience.
- Track record of successfully creating shareholder value
within distressed companies and transforming these companies in
collaboration with key stakeholders.
- Adviser to companies on investment and business
strategies.
- Served as a portfolio manager at QVT Financial LP, a
multi-billion-dollar investment firm where, among other things, he
led investment activities in closed-end fund arbitrage and related
special situations globally.
- Served as senior quantitative analyst and trader at Weiss
Asset Management from 2003 to 2005, where he developed quantitative
trading methodologies and software as well as managed a broad array
of the firm's business operations.
- CFA® Charterholder. Received an AB in Physics,
magna cum laude, from Harvard
University and is enrolled in a PhD program at the
University of Texas at
Austin.
Additional biographical information regarding Wynnefield
Capital's director nominees will be included in Wynnefield
Capital's amended Statement of Beneficial Ownership on Schedule 13D
to be 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 and
Ron Avni 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. 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:
Mark Semer / Daniel Yunger
Kekst CNC
212.521.4800
mark.semer@kekstcnc.com / daniel.yunger@kekstcnc.com
Proxy Solicitor:
Saratoga Proxy Consulting
John Ferguson / Joe Mills
212.257.1311
info@saratogaproxy.com
1Performance measured through close of trading on
February 28, 2020.
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SOURCE Wynnefield Capital, Inc.