Roaring Blue Lion Capital Management LP has encouraged shareholders to vote on HomeStreet Inc.'s proxy card after a regulator's guidance indicated that a vote on the activist's proxy card may not be effective.
A tussle between HomeStreet and Blue Lion has been ongoing regarding the appointments to the company's board. HomeStreet approached its state regulatory authority, the Washington State Department of Financial Institutions, in early March to determine whether voting on Blue Lion's proxy card is acceptable under Washington banking law.
The regulatory authority, in response, issued an interpretive letter regarding when a proxy challenge constitutes an investor seeking a change in control of the bank, which requires regulatory approval. HomeStreet said the interpretation showed that votes on the Blue Lion proxy card could be invalid. Blue Lion disagreed with this assessment, but encouraged investors to vote against HomeStreet's director nominees Scott Boggs and Douglas Smith on the HomeStreet-issued proxy card.
