Activist Manager Wins Round One Against Energy Firm

Jun 30 2006 | 6:35pm ET

Activist hedge fund manager Daniel Loeb is ruffling feathers in another boardroom, this time "officially" winning a seat on the board of Massey Energy Company. But the energy firm isn't through contesting the results.

Loeb, founder and ceo of New York hedge fund Third Point, and Todd Swanson, also of Third Point, were elected to the board of the energy firm in a proxy contest on May 16, but certification of the election results were delayed after Massey challenged their validity.

On Wednesday, IVS Associates, the independent election inspector chosen by Massey, confirmed that the election results were valid. However, the Richmond, Va.-based energy firm plans to take the issue to court.

"Now that the election results have been certified, we hope that we can put this proxy contest behind us," said Loeb in a statement.  "Massey's shareholders have sent a strong message that the Massey board must focus on steps to enhance shareholder value."

Third Point owns approximately 5.9% of Massey's outstanding shares. Simultaneously, Massey issued a statement saying the firm "believes that the election of Third Point's two nominees resulted from an incorrect treatment of withheld shares by the inspectors of election under the cumulative voting provisions of Massey's charter. The company further believes that if the withheld shares had been treated correctly for cumulation purposes, Third Point would have won only a single seat on the board and two incumbent directors would have been reelected."

The energy firm is now requesting that the Delaware Court of Chancery reviews the election results and makes a final determination.

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