Proxy Advisor Backs Blockbuster Board Slate9 Jun, 2010 By: Erik Gruenwedel
Blockbuster June 9 said that a top independent proxy advisory firm has recommended shareholders elect all seven of the Dallas-based DVD rental company’s board of director nominees.
The rental chain said Glass, Lewis & Co. urged shareholders at the June 24 annual shareholder meeting to reaffirm or vote in nominees Edward Bleier, Kathleen Dore, Gary Fernandes, Joseph Fitzsimmons, Jules Haimovitz, James Keyes, and Strauss Zelnick, according to a regulatory filing.
In its analysis of board candidates, Glass, Lewis & Co. singled out voting against dissident shareholder Gregory Meyer’s unsolicited attempt to replace director Gary Fernandes nomination.
“We believe the dissident has largely failed to provide shareholders with a cogent, practicable plan … and, by extension, has failed to establish that his plans are superior to those disclosed and undertaken by the board,” the advisory firm wrote.
Disclosure by Blockbuster of Glass, Lewis & Co.’s recommendation comes the same day Meyer issued a separate proxy filing seeking to set the “record straight” on misrepresentations he said the incumbent board has levied against him.
Meyer, who holds more than 600,000 shares of Blockbuster common stock, formerly owned a DVD kiosk vending company he later sold to Coinstar, parent of Redbox.
In his filing, Meyer, said his election to the board represented a “moderate proposal” aimed at undermining the status quo he said has been responsible for a 95% decline in shareholder value.
Specifically, Meyer criticized Fernandes overseeing 400,000 new subscribers to Blockbuster’s by-mail/subscription service at a time when Netflix added 8 million members. He said Blockbuster has yet to generate “a single dollar” of revenue from its partnership with NCR Corp. and the rollout of more than 4,000 Blockbuster Express kiosks to date.
“This deal is the epitome of ‘too little, too late,’” Meyer wrote. “Again, any involvement Fernandes had in negotiating the NCR kiosk deal would be a reason he should not be re-elected to the Blockbuster board.”
Regardless, Blockbuster’s new board faces a $41.5 million interest payment due July 1. The company’s shares closed unchanged at 29 cents per share.