JANA Partners LLC Announces SITEL Board Nominees and Intention to Replace Additional Board Members
23 Novembre 2005 - 7:24PM
PR Newswire (US)
NEW YORK, Nov. 23 /PRNewswire-FirstCall/ -- JANA Partners LLC
("JANA"), an approximately $4.5 billion hedge fund, announced today
that it will promptly send notice to SITEL Corporation (NYSE:SWW)
("SITEL" or the "Company") of its intention to nominate three
directors for election at the Company's 2006 Annual Meeting (the
"Meeting") and to bring proposals before the Meeting to remove and
replace additional members of SITEL's Board of Directors (the
"Board"). JANA currently beneficially owns approximately 14.5% of
the outstanding common shares of SITEL. In response to an
announcement by SITEL today that it had hired a financial advisor
and would be evaluating "various strategies" to "enhance long-term
shareholder value", JANA Managing Partner Barry Rosenstein
questioned both the timing of the announcement and the commitment
of the Board to pursue all avenues of maximizing shareholder value,
including a sale of the Company. In a letter sent today to the
Board, Mr. Rosenstein stated that today's sudden announcement
"gives an overwhelming appearance of gamesmanship. The timing of
this announcement, shortly before the November 30 deadline for
submitting director nominees and other proposed business for the
Company's 2006 Annual Meeting, causes us to believe that it is
designed to discourage shareholders from submitting such proposals
prior to the deadline." "[W]e have strong reservations about
entrusting the current Board to follow through in a meaningful and
timely manner on its already vague commitment to 'evaluate various
strategies'," Mr. Rosenstein continued. "We have seen no indication
prior to today's abrupt announcement that the Board is seriously
exploring any potential strategic alternatives. In fact, we are
aware that more than one credible buyer has approached the Company
regarding a sale or merger but has been rebuffed by the Company.
Additionally, we note that the Company's announcement appears
deliberately worded to avoid the mention of exploring a sale of the
Company, an exercise which we believe is essential to pursuing
maximum value given the Company's operating history and failure to
create value." Mr. Rosenstein went on to state in his letter that
"the current leadership's history of destroying shareholder value
gives us serious concern about entrusting this process to the
current members of the Board." As an example, Mr. Rosenstein cited
SITEL's inability to translate growth in revenues to proportionate
increases in profitability, noting that "Despite growing revenues
by approximately 69% since 1998, the Company's EBITDA (excluding
charges) has actually fallen by approximately 14% during this
period through the twelve months ended September 30, 2005.
Corresponding with this decline in EBITDA, SITEL's EBITDA margins
have been nearly cut in half (falling to 5.1% for the twelve months
ended September 30, 2005 from 10.1% for fiscal year 1998)." Mr.
Rosenstein went on to note that the Company's bylaws force
shareholders who wish to nominate directors or bring other business
before the Annual Meeting to do so almost six months prior to the
expected date of the meeting, meaning shareholders who fail to
comply with such deadline will be left without recourse at next
year's meeting should the Board fail to pursue maximum shareholder
value. "Without any real enforcement mechanism, the Board's
belated, and to us largely unconvincing, announcement that it
intends to evaluate various strategies is a potentially toothless
exercise," Mr. Rosenstein stated in the letter. "We have repeatedly
attempted to work with you to come up with a solution to the
pressure the November 30 deadline imposes, but your unwillingness
to address this issue leaves us with no choice but to submit our
nominations in accordance with the current deadline in order to
protect our interests as shareholders, and today's announcement has
done nothing to change our opinion regarding this matter."
Background JANA Partners LLC, a Delaware limited liability company,
is a private money management firm. DATASOURCE: JANA Partners LLC
CONTACT: JANA Partners LLC, +1-212-692-7696
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