DealLawyers.com Blog

November 29, 2016

Proxy Access: Was GAMCO’s Gambit What Advocates Wanted?

As Broc blogged yesterday on TheCorporateCounsel.net, National Fuel Gas responded to GAMCO’s attempt to use its proxy access bylaw by rejecting its nominee. This Cleary blog asks the larger question – is this situation really what proxy access advocates had in mind?  GAMCO is hardly the proxy access prototype:

GAMCO is indeed a long-term and significant holder of NFG stock – currently holding with its affiliates over 7% of NFG’s common stock.  But keep in mind that GAMCO is not necessarily your typical long-term passive investor of legend.  In fact, GAMCO has launched more than 20 proxy fights, and, in the case of NFG, made a stockholder proposal in support of the spin-off of NFG’s utility business.  The twist is the GAMCO stockholder proposal received the support of only 18% of NFG’s shareholders.  So NFG was handily winning the battle with GAMCO as activist.  Now they need to win the battle with GAMCO as long-term shareholder.

GAMCO’s gambit raised the possibility that proxy access could provide a “halo” around the nominee of an activist whose prior efforts were rejected by shareholders.  Is that what this is supposed to be about?

For now, it looks like this is an academic issue.  Cydney Posner notes that GAMCO filed a 13D/A yesterday in which it said that its nominee had decided to withdraw, and that GAMCO would no longer pursue proxy access.

John Jenkins