Marathon Asset Management LP on March 22 asked Medley Capital Corp. shareholders to vote against the company's proposed merger into Sierra Income Corp..
Marathon also asked Medley shareholders to vote to call a special meeting to terminate its investment advisory agreement with MCC Advisors and enter into an investment advisory agreement with Marathon, an alternative to the Medley Capital and Sierra Income deal.
Marathon Asset Management reiterated various negatives of the existing deal, such as entrenchment of consistently underperforming management, a likely decline in Medley Capital shareholder equities, and removing any hopes for a higher valuation. The company also cited a Delaware court's opinion that noted various irregularities in negotiation of the deal terms and that Medley Capital's board breached their fiduciary duties in the process.
Another shareholder, NexPoint Advisors LP, proposed a deal in February, asking Medley Capital shareholders to approve an advisory deal with NexPoint following the consummation of the merger, instead of with Medley Management.
Medley Capital shareholders will vote at a special meeting March 29 whether to approve the existing deal.