Four of the director nominees to Newell Brands Inc.'s board by the activist investor Starboard Value LP have withdrawn their nominations, following an agreement Newell reached with investor Carl Icahn.
Ian Ashken, Domenico De Sole, Martin Franklin and James Lillie withdrew their nominations to the board of the consumer and commercial products company, Starboard said in a statement March 20.
The Starboard withdrawals follow Newell's agreement with Icahn and decision to make changes to its board March 19, including the appointment of a new chairman. Newell, together with Icahn, who owns a 6.86% stake in the company, elected Patrick Campbell as the board chairman and appointed Brett Icahn, Andrew Langham and Courtney Mather to the company's board.
"We believe that our collective actions have moved the company substantially. However, we agree with Starboard that there are still many strategic and operational improvements which can be made and which are in management's control. Given the circumstances, we plan to focus on other opportunities but fully support Starboard in their deliberations," Franklin said in the statement.
Franklin is one of three former Newell board directors, including Ashken and De Sole, who resigned from the board Jan. 25. Franklin said they believe Newell management and the board are "ill-equipped to deal with the strategic and execution issues facing the company."
The trio then joined Starboard, which owns approximately 4.5% of the New Jersey-based company, in its campaign to replace Newell's board, and they were subsequently nominated by the activist investor to Newell's board of directors.
Starboard said March 14 that the three former directors would buy a total of $25 million worth of Newell stock if the activist investor replaced Newell's board in the proxy fight.
The activist investor said it continues to believe that Newell is "substantially" undervalued and that there are significant opportunities to boost the shareholder value. According to Starboard, there is an opportunity to improve Newell's operating income by approximately $500 million to $800 million from actions that are within the management's control apart from the asset sales.
Starboard said it is reserving its rights as to the election contest, and should it move forward would reduce its slate to a minority of the board.